Iran is discreetly scouring the globe for second-hand oil tankers to replace its ageing fleet and keep crucial crude exports flowing as US sanctions start to bite
Iran is discreetly scouring the globe for second-hand oil tankers to replace its ageing fleet and keep crucial crude exports flowing as US sanctions start to bite, Iranian and Western sources said.
Since US President Donald Trump reimposed sanctions in November, exploratory talks with South Korea for up to 10 new supertankers have stalled, Panama has removed at least 21 Iranian tankers from its registry and Tehran is now looking for extra vessels in places such as Vietnam, the sources said.
Washington has put curbs on Iran’s port, energy and shipping sectors but it has given waivers to the country’s eight biggest oil customers, which include China, India and Japan, so they can keep buying Iranian crude.
With oil exports reaching about 70% of Iran’s revenues, maintaining an effective fleet of tankers to store and move that oil is crucial for Tehran. But potential sellers of used vessels are more wary this time round after a Greek network that helped Iran buy tankers under previous sanctions was blacklisted. Western insurers are also steering clear, complicating Iran’s attempts to export crude to US-approved buyers.
If Iran runs into difficulties exporting its oil it could have a significant impact. Besides the importance of oil for its budget, Iran is estimated to produce about 2.8 million barrels a day, more than 9% of Opec’s output.
“Whatever sector you look at, companies will keep in mind being cut off from the US financial system when deciding whether to trade with Iran,” said Mehdi Varzi, an independent oil consultant who has previously worked at the state-run National Iranian Oil Co.
Israel warned this month that its navy could take action against Iran, which it said was smuggling oil using clandestine measures similar to those employed during the previous round of sanctions.
According to maritime specialists, methods used for skirting sanctions in the past have included changing the names of ships, switching off Automatic Identification System location transponders and conducting ship-to-ship transfers of oil.
Since the previous round of sanctions in 2012, ship tracking has become more sophisticated and more available. Washington has also cracked down on more Iranian networks, making it riskier to get involved with Iran, according to bankers.
Iran reached an agreement with world powers in 2015 over its nuclear programme which led to the lifting of sanctions in 2016 but Trump pulled out of the deal in May last year and reimposed US curbs in November.