April 25, 2014
Monday, December 2, 2013

Iran taps tanker shipping network to tackle unsold oil glut

A worker walks atop a tanker wagon to check the freight level at an oil terminal on the outskirts of Kolkata. An Indian delegation will shortly visit Iran to discuss the oil payment mechanism, and will include representatives from the oil ministry, oil companies, and refiners. Iran and six world powers reached a deal on Sunday to curb Tehran''s nuclear programme in exchange for limited relief from

Middle Eastern country deploying more tankers to help with thel oversupply of oil, with effects of limited sanctions relief taking time to have impact


US and EU measures have already reduced Iran’s oil exports by more than half from pre-sanction levels of about 2.2 million barrels per day, costing Iran billions of dollars in lost revenue a month. But Iranian officials say they are learning to get round sanctions, which they reject as unjustified.

Trade sources said the NITC tanker Honesty made a ship-to-ship (STS) transfer with a foreign-owned vessel in September in an STS area within Dubai’s anchorage waters.

“STS transfers around the UAE are another method to offload oil. Whether the oil is immediately sold or held until a buyer can be found depends on the deal but it gets a cargo off their hands,” a Middle East based trade source said.

A source at Dubai’s Maritime City Authority said the port’s priority was ensuring there were no accidents or pollution in its waters and it did not check the source of the oil.

The NITC official, who declined to be named, said the group were not doing many STS operations these days.

NITC has taken delivery this year of seven new tankers, increasing its supertanker fleet to 37 vessels with a carrying capacity of 64 million barrels. The vessels were part of a US$1.2 billion order agreed in 2009 with two Chinese shipyards for 12 new supertankers. Five were delivered last year.

NITC also has 14 small crude oil tankers with another 12.5 million barrels in capacity.

Data from IHS Maritime showed 14 NITC tankers were being used to store oil mainly around Iranian anchorages at present.

“The number of vessels inactive or available for storage has remained steady in the last few weeks,” said Richard Hurley, a senior analyst at IHS Maritime.

“Regular voyages continue to be made (by other NITC tankers) to the three regular customers, China, India and Turkey, with occasional ones to South Korea and Syria.”

US brokerage Poten & Partners said 16 NITC supertankers, with a maximum of 32 million barrels, were storing Iranian oil.

“Even if sanctions are lifted, it is important to note that crude oil production would take some time to return to pre-sanction levels since restarting flows takes time and additional investment,” Poten said.

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