Report: U.S. Mulls Reviving Wartime ‘Prize Courts’ to Seize Iranian Tankers

Report: U.S. Mulls Reviving Wartime ‘Prize Courts’ to Seize Iranian Tankers

The Trump administration is preparing the revival of wartime ‘prize courts’ to fast-track the seizure and sale of captured Iranian oil and maritime cargo, media reports say.

These courts, dormant since the Second World War, would allow the U.S. to legally confiscate dozens of Iranian oil tankers currently transiting international waters. “The Justice Department is preparing to activate a long-dormant maritime war court to streamline military capture of Iranian oil tankers as US prizes,” Bloomberg reported Wednesday, citing sources.

The mechanism will accelerate the liquidation of seized Iranian assets by shielding the U.S. from third-party claims, the article suggests. “The unfinalized plans, if adopted, would offer a faster path for federal prosecutors to claim oil and other cargo taken from enemy or neutral vessels as US property,” the news outlet added. “The seized goods would then be sold with proceeds transferred to the treasury.”

Writing for the Wall Street Journal in May 2026, Professor Eugene Kontorovich, an eminent expert in international and maritime law, had recommended that the U.S. could “put teeth” in the Iranian blockade “by reviving the law of prize, which governs ships seized during war, and by authorizing privateers to attack enemy shipping.”

The measure under consideration also stands on firm moral ground. It is worth noting that large parts of the Iranian oil sector are controlled by Iran’s Islamic Guard (IRGC), a U.S.-designated terrorist group.

The planned @USNavy revival of maritime prize means the U.S. can capture any Iranian merchant vessesls – as well as any third country ship trying to run the blockade. It can then take title to them in court and sell the ships and cargo, which for a loaded oil tanker could bring… https://t.co/GARDrQkXvi

— Eugene Kontorovich (@EVKontorovich) August 27, 2026

Bloomberg continues:

The Justice Department is preparing to activate a long-dormant maritime war court to streamline military capture of Iranian oil tankers as US prizes, according to three people familiar with the plans.

Reviving prize courts, which is expected to face legal challenges, is intended to strengthen the blockade of Iran and offset the cost of the conflict.

Aaron Reitz, the Houston-based US attorney whose office is partnering with department headquarters on the initiative, confirmed DOJ is “now reviving” prize courts, which he described as an “ancient body of maritime law.”

The unfinalized plans, if adopted, would offer a faster path for federal prosecutors to claim oil and other cargo taken from enemy or neutral vessels as US property. The seized goods would then be sold with proceeds transferred to the treasury. (…)

“Our national security interests may require the United States military to seize vessels or cargo supporting the enemy during military conflict,” Reitz said in a statement. “If that happens, our federal courts must be ready to adjudicate the disposition of these captured vessels and cargo.”

Ship owners and Iranian terrorism victims are among the potential litigants expected to challenge the prize court’s use, maritime lawyers and former prosecutors said. DOJ, the US Navy, and the judiciary would also face operational hurdles carrying out a court process with which they have zero experience.

“This really is a historical area of law that is not tested in modern times,” said Allison Luzwick, a Holland & Knight attorney specializing in the maritime industry. “Great strides have been made in international law and the law of war since the late 1800s, and all of that is going to come into play when we’re actually looking at proceedings involving a vessel that is potentially seized under Prize Act authority.”

Once a regular feature of 18th and 19th century naval combat, prize courts have gone largely unused since the Spanish-American War of 1898 and lain entirely dormant since World War II. In recent decades, the US has shifted to relying on civil forfeiture law as the mechanism for seizing ships and obtaining their assets to enforce sanctions violations.

DOJ’s planning, which has been coordinated with the Pentagon, comes as US forces have intercepted and seized multiple Iranian-owned or linked ships since imposing a blockade in April. (…)

Prize authority, while coming with its own legal risks, would entail a less complicated transfer of proceeds, allowing the US to mitigate the risk of outside claimants slowing down the sale, said Luzwick and other lawyers. (…)

Supporters describe prize law’s benefits of expediting the process of transferring the proceeds from oil tanker cargo into the US treasury. The move may also send a global signal of President Donald Trump’s intent to add a legal enforcement mechanism to bolster the US blockade.

“It helps offset the price of the war,” said Eugene Kontorovich, an international law professor at George Mason’s Antonin Scalia School of Law. “It also shows Iran that America is really treating this as a serious international blockade and is willing to use all the tools at its disposal.”

If established, however, the approach would invite legal challenges as to whether the US is engaged in hostilities that give rise to the Prize Act and whether the lack of congressional authorization of the conflict renders captures unlawful.

The report comes just days after the U.S. launched ‘Operation Economic Outcast,’ a wide-ranging campaign to sever Iran from international trade and finance. Treasury Secretary Scott Bessent on Monday unveiled a sweeping economic offensive, marking the most comprehensive sanctions campaign against a foreign adversary since World War II.

With new measures in place, international buyers, including China, are reluctant to buy or offload Iranian oil. According to media reports, vast quantities of Iranian crude are already sitting idle in foreign ports. Fox News noted that “nearly 40 million barrels of Iranian crude are sitting aboard tankers in waters near Malaysia, east of Singapore.”

“The cargo amounts to roughly 20 very large crude carriers’ worth of oil, a floating stockpile that could still give Tehran a way to turn crude already outside the blockade zone into cash even as the blockade sharply restricts fresh exports,” the broadcaster reported Wednesday.

U.S. Navy E/A 18G electronic-warfare aircraft patrol the skies over the Middle East while the U.S. continues to enforce the blockade against Iran. As of Aug. 27, CENTCOM forces have redirected 75 commercial vessels, disabled 3 and boarded 2 to ensure compliance. pic.twitter.com/JNzig4owRl

— U.S. Central Command (@CENTCOM) August 27, 2026

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