Panama removes 650 ships from registry amid scrutiny over Iran sanctions

Panama’s Maritime Authority said it has removed more than 650 vessels from its shipping registry since 2019, including 214 in the past year alone, as it intensifies efforts to comply with US sanctions on tankers linked to Iran.

The registry, one of the world’s largest with over 8,500 vessels, has come under renewed pressure from the US and watchdog groups over its role in what they describe as enabling illicit oil shipments from Iran. Ships removed from the Panamanian registry can no longer operate under the country’s flag.

The move follows criticism from US-based United Against Nuclear Iran (UANI), which accused Panama of being the "flag of choice" for Iranian oil trade in violation of US sanctions.

UANI says nearly 17% of vessels suspected of transporting Iranian crude sail under Panama's flag, using tactics such as flag-hopping, false ownership documentation, and disabling tracking systems.

“This is not just a failure of Panama's registry. It’s a direct threat to global sanctions compliance and regional and US security,” UANI said in a statement last month.

Panama has defended its enforcement record, citing Executive Decree No. 512, which empowers authorities to deregister ships linked to sanctioned entities. In March, 107 vessels were removed, with 18 more under review.

The Maritime Authority said it has reinforced controls on ship-to-ship operations and is collaborating closely with the United States to prevent sanctions evasion.

In 2019, Panama signed an agreement with Liberia and the Marshall Islands to exchange data on suspect vessels.

The measures come as Iran expands its oil exports, despite sanctions. Iranian Oil Minister Mohsen Paknejad recently announced a production boost of 150,000 barrels per day, with plans to increase daily oil and gas output further through $10 billion in new energy projects.

While Tehran has not addressed the UANI report directly, it has consistently rejected US sanctions as illegitimate and maintains that its exports are legal under international law.

In recent months, the US has stepped up enforcement efforts, seizing Iranian tankers in the Persian Gulf. Some vessels were found using forged Iraqi documents, according to Iraqi officials.