Even Iran's smugglers feel pressure

Brian Murphy / The Associated Press /

KHASAB, Oman — By dawn, the unmarked speedboats from Iran pull into port. By dusk, they are racing back across the Strait of Hormuz loaded with smuggled consumer goods ranging from Chinese-made shoes to cut flowers from Holland.

Even as sanctions squeeze Iran ever tighter, there’s one clandestine route that remains open for business: a short sea corridor across the Persian Gulf connecting a rocky nub of Oman and the Iranian coast about 35 miles away.

Yet even this established smugglers’ path is now feeling the bite from the pressures on Iran over its nuclear program.

Business is sharply down, the middlemen and boat crews say, as the slumping Iranian currency leaves fewer customers for the smuggled wares.

At the same time, the risks of interception are higher as Iranian authorities step up patrols near the strategic oil tanker lanes at the mouth of the Gulf.

The strait, which is the only access in and out of the Gulf, has been the scene of Cold War-style brinksmanship between Iran and the West after Tehran last month threatened to block the passageway for about one-sixth of the world’s oil in retaliation for new U.S. sanctions.

“We used to make two or three trips across every day. Now, it’s maybe one,” said an Iranian middleman, who gave only his first name Agheel to protect his identity from authorities in his homeland.

He watched crews load up a pickup truck with bolts of fabric from Pakistan and table-size boxes of cut flowers from the Netherlands, before the trucks headed off through the treeless mountains to Khasab port.

The operation smuggles in merchandise to avoid Iranian tariffs and to bring in American and European products that have disappeared from Iranian markets because of international sanctions. Experts note that the consumer items post no real challenge to efforts to block material with military or nuclear uses.

“Still, it shows you can’t close off all channels into Iran no matter how hard you try,” said Paul Rogers, who follows security affairs at Bradford University in Britain. “People will find a way.”

On this side of the Gulf, the smugglers operate under a tacit tolerance from authorities, even though Oman and the United Arab Emirates are close U.S. allies and have pledged to enforce sanctions.

The goods are legally imported into the UAE and truck drivers take them across the border, paying the customary 50 dirham ($13.50) entry fee, according to the smugglers interviewed by The Associated Press. In Khasab, the merchandise is taken to warehouses and then piled on the docks less than 100 yards from the port police headquarters.

A shipment arranged by the Iranian smuggler Agheel this week was done with practiced efficiency.

A pickup truck backed into a wood-floored warehouse with hundreds of cases of cigarettes bundled three together and wrapped tightly in gray plastic weave — in total 3,000 cigarettes under south Asian brands such as Ruby Menthol. The truck was soon sagging under the weight of boxes piled five high.

Agheel did some quick calculations: Each three-case load cost him about $1,200 and he could sell them to merchants in Iran for the equivalent of about $1,350 under current exchange rates. The truck pulling out of the warehouse represented a potential return of about $4,500.

“If we don’t get caught,” he added.

The smugglers have their ways of avoiding Iranian authorities.

Spotters off the coast — on the island of Qeshm and near the port of Bandar Abbas — call in coast guard movements to Khasab. The speedboat drivers pay close attention to the water conditions in the Strait and try to approach the Iranian coast just after sunset. The trip can take as little as 90 minutes in calm seas and up to four hours in rough water in the stripped-down 16-foot fiberglass boats.

Agheel’s truck passed through the Khasab customs station at midday and then down a strip of hardscrabble road.

At the port — almost in the shadow of a Costa cruise ship making a day stop — dozens of boats were being packed and secured for the trip. There were no names or markings on the speedboats. But the items loaded on carried familiar logos: LG 42-inch flatscreen TVs, Discovery Channel DVDs, Panasonic microwaves, Yamaha motorcycle parts. Also in the stacks were textiles, satellite dishes and Chinese-made clothes and shoes.

One boat driver, who gave his name only as Aziz, had a breakfast of eggs, beans and Mountain Dew as he waited for the day’s shipment to be loaded for the return run to Qeshm, a long arrow-shaped island near the Iranian coast and a main waystation for the smugglers.

“No one wants to buy because the (rial) rate is not stable,” he said.

He also said the Iranian coastal patrols have been boosted amid the escalating tensions over the Strait.

If spotted by patrols, Aziz said the two-man boat crews try to heave the goods overboard. They then must pay back the smuggling network, which can amount to thousands of dollars.

But it’s worth the risk, he said.

“The situation is getting worse now,” he said. “All the prices are up and Qeshm has nothing else” except smuggling.