US sanctions Iran, tanker Russian oil and increased crude oil costs
Siyi Liu and Chen Aizhu
SINGAPORE (Reuters) – The amount of Russian and Iranian oil held on ships has hit months’ highs due to strict US sanctions, reducing buyers and fewer tankers available to deliver freight , there will be an increase in crude oil costs, trade sources and analysts said.
Since October, Washington has imposed multiple sanctions on oil-handling vessels and entities from Iran and Russia, disrupting trade with major Chinese and Indian importers.
US President Donald Trump recovered his “maximum pressure” campaign in Iran last week. This included efforts to drive oil exports to zero in order to stop Tehran from obtaining nuclear weapons.
Xu Muyu, a senior analyst at Kpler at Data Analytics company, said OPEC producers have struggled to attract new vessels since sanctions were imposed in the fourth quarter.
Last month, the ban on licensed tankers by China’s Shandong Port Group was a call in eastern province ports, home to most independent refiners, the major buyers of Russian and Iranian oil, and such It made it difficult for cargo to be discharged from the hospital.
Shipbroker Braemar ACM said 57% of the 126 very large crude oil airlines (VLCCs) currently involved in Iran’s crude trade to China are already subject to US sanctions.
Three analysts estimate that Iranian oil volume in floating storage has increased from 10 to 20 million barrels so far this year as exports rise and delivery to China declines .
However, calculations of the total amount of Iranian oil in floating storage vary widely as analysts use various methodologies to track the so-called shadow fleet.
Data from KPLER shows Iran’s oil floating storage at 25 million barrels in more than a year, with about 80% of the cargo floating from Singapore and Malaysian waters.
In contrast, Emma Li, a senior analyst at Tanker Tracker Vortexa Analytics, estimates that Iran’s crude and condensate volumes in floating storage stood at 73.1 million barrels at the end of January.
Iran’s exports rose to 1.78 million barrels for two months in January after hitting a two-year low of 1.45 million in November.
“Smuggling technologies such as deactivating AIS transponders and spoofing and underwriting ship-to-ship transfers means RE may have more Iranian oil floating around,” consulting said Richard Bronze, head of geopolitics on the energy side.
Crude oil prices have risen as there are fewer non-fiscal ships to deliver oil to China.