- The US government has sold seized shadow fleet tankers Era and Lileo to recycler GMS, with both vessels now heading to Alang for demolition
- The sale closes a sanctions case spanning Venezuelan oil exports, Russian ownership structures and a dramatic US pursuit of Era across the Atlantic
- Despite court approval and US Treasury waivers, banks, insurers and service providers were reluctant to engage, underscoring the difficulties of disposing of sanctioned vessels even after seizure
The US sold two seized fleet tankers, Era and Lileo, for scrap after authorities linked the vessels to Russian ownership structures and sanctioned oil trades, Reuters reported.
Dubai-based recycling company Global Marketing Systems bought both ships for an undisclosed price. The tankers have been sent to Alang, India, where shipbreakers will dismantle them.
GMS said a US court decision provided the legal basis for the sale. Its chief executive, Anil Sharma, said the company faced difficulties completing the agreement because legal uncertainty surrounded the ships’ previous owners.
The Era, originally named Bella 1 and flying the Panama flag, was detained by the US military on January 7 in waters south of Iceland. In late December, the US Coast Guard had tried to intercept it near Venezuela during a blockade targeting Venezuelan oil exports, according to The New York Times.
As the ship fled across the Atlantic, it changed its name to Marinera and switched to Russian registration. Washington said the tanker carried sanctioned raw materials from Venezuela and Iran. US authorities identified its owner as Ilya Bugay, a businessman from Crimea.
Moscow responded sharply. Russian officials accused the US of illegal force and a breach of freedom of navigation. Russia’s Foreign Ministry later appealed to US President Donald Trump to release the crew.
The second tanker, Lileo, formerly Veronica, also faced US sanctions and was seized in the Caribbean in January. During the pursuit, the vessel tried to avoid arrest by changing its name to Galileo and raising the Russian flag.
Reuters reported that US forces have seized 10 oil tankers under the naval blockade of Venezuela. Sanctioned vessels frequently change names, flags and ownership records to hide shipments.
The seizures come as the US Senate has almost unanimously backed a bipartisan sanctions bill targeting Russia and Iran. The bill has moved to the House of Representatives.
It proposes tariffs of up to 500% on Russian goods and sanctions against Russian banks and the country’s shadow fleet.
The pressure on shadow fleet shipping has also turned deadly. For Indian sailors recruited onto the Settebello, the voyage looked like another maritime job. The ship they boarded was a shadow fleet tanker headed into a war zone.
The Settebello had spent at least five years moving Iranian oil under US sanctions, often hiding its location, according to maritime tracking firm TankerTrackers.com. It disappeared from standard tracking again in early June in the Gulf of Oman, east of the Strait of Hormuz, where it loaded fuel from other ships at sea.
On June 10, the US Navy targeted the vessel.
Shortly after 7 a.m., US missiles struck the engine room, where an engineer and a mechanic had just started their shifts. Both died instantly. A young cadet eating breakfast nearby suffered fatal head wounds.
They became the first and only civilian victims reported in connection with America’s blockade on Iranian ports. The United Nations has counted at least 17 sailors killed since the war began, most of them casualties of Iranian strikes.
Their deaths show the risks merchant crews face in the Middle East, where fighting between the US and Iran has made waters around the Strait of Hormuz among the world’s most dangerous commercial routes.
US Central Command said it used precision munitions against the Settebello’s engine room because the tanker violated the blockade on Iranian ports and repeatedly failed to follow directions.
Evidence reviewed by reporters suggests the ship was drifting with its engine off when the strike occurred. That detail has raised questions among maritime experts about whether the attack represented an avoidable and excessive use of force.
The crew faced higher danger because the ship’s command chose to load oil, likely Iranian, through several ship-to-ship transfers before the strike, despite US Navy warnings about the blockade.
Accounts of the final days before the attack remain incomplete. Crew members, US military officials and victims’ families provided details, but US Central Command declined to release recordings of communications with the ship or specify exactly when those communications occurred.
The 28 men aboard the Settebello were mostly Indian. Most had joined within the past year, according to records from their recruitment agency.
The US military described the Settebello as part of a shadow fleet built to evade sanctions, although the ship itself did not appear on the US sanctions list.
In late April, the crew began its voyage from Lianyungang, China, toward the Gulf of Oman, ship-tracking data showed.
Rajesh Sharma, whose son Aditya was the trainee cadet killed in the strike, said he had urged his son during daily calls to leave the vessel and return home. Aditya told him he needed to keep working if he wanted to become a captain one day.
During the first eight days of June, the Settebello appeared stationary in Oman’s territorial waters off Shinas, according to TankerTrackers.com satellite imagery analysis. A crew member said the ship had dropped anchor during that period.
A new captain, Sanjeet Kumar Behera, joined the tanker on June 2. After that, the Settebello loaded oil at sea from several ships, two crew members said. One crew member suspected the fuel was Iranian but said the crew never received confirmation. He said only the owner and captain would know the source.
Captain Tim Hawkins, a spokesman for US Central Command, told that US intelligence determined the oil was Iranian. He said the Settebello’s crew ignored almost 60 verbal radio warnings in the days before the strike and often answered belligerently. He also said the ship ignored at least eight military shows of force, including flares and fighter jet flyovers.
Manoj Yadav, general secretary of the Forward Seamen’s Union of India, said Captain Behera and senior crew members had briefed him. They told him they received only broad radio warnings after June 2 and did not believe those warnings applied to the Settebello.
Yadav said the messages told vessels not to move toward blockaded Iranian ports and went out over a radio system used by many ships. He added that the crew denied responding to US warnings.
On June 8, as hostilities threatened a two-month cease-fire, the Settebello made its riskiest move. A crew member said the ship sailed for several hours into the middle of the Gulf of Oman, where a second ship was expected to transfer oil to the tanker.
By then, the Settebello carried 26,000 metric tons of bitumen, a thick petroleum product used in road construction, according to a crew member.
Three crew members said the crew then turned off the engine and the ship began drifting. The second vessel never arrived.
The tanker’s manager, Dubai-based IOS Marine FZE, later accused the US Navy of causing the deaths of three Indian seafarers. The company disputed core parts of the US military’s account, including whether warnings reached the vessel and whether the Settebello transported Iranian oil.
In a public statement, IOS Marine called for a full international investigation into the June 9 Gulf of Oman incident. The company said the families of the dead sailors deserved answers.
India’s government confirmed that three Indian crew members initially reported missing after the attack had been found dead. Twenty-one other Indian seafarers were rescued.
CENTCOM said US forces disabled the Palau-flagged Settebello after the tanker allegedly tried to move Iranian oil through the Gulf of Oman in violation of the US-led blockade. The command said a US aircraft fired precision munitions into the engine room after the crew repeatedly failed to comply with American instructions.
“We categorically reject claims that the Motor Tanker SETTEBELLO ignored warning calls, communications, or instructions,” the company said. “To the best of our knowledge and based on information available to us, no warning call, message, or communication was ever successfully established with the vessel prior to the actions taken against it.”
The dispute puts pressure on the legal basis for maritime enforcement in blockade zones and on the treatment of civilian seafarers aboard suspect vessels. It also raises hard questions for marine insurers, P&I clubs, ship managers and crewing agencies that touch shadow fleet trades, even indirectly.
According to Beinsure analysts, the insurance exposure no longer sits only in hull damage or sanctions compliance. The bigger risk now reaches crew liability, war-risk cover, cargo ownership, port-state enforcement and claims disputes after naval action.
For shipping companies, the message looks harsh. Name changes, flag switches and opaque ownership records no longer offer much insulation when military enforcement follows the cargo. For sailors, the risk is worse. They sign employment contracts, board tankers and then discover the voyage sits inside a geopolitical conflict they didn’t choose.
