Iran has earmarked more supertankers from its state-owned fleet to store grades of heavy crude in the Persian Gulf, increasing supply stored offshore to 30 million barrels, partly from an inability to sell it, prompting oil traders to speculate that Iran might shut in fields.
Oil traders say the sulphurous crude in storage, first assembled some two months ago, is from the Soroush and Nowrouz fields which for price and quality reasons the country is finding difficult to market.
“They’ve had problems selling it and it’s up for grabs probably at a discount,” Reuters quoted a shipping broker as saying.
“Some of the refiners in the eastern Med can use the crude.
“Others in the central and western Mediterranean with more sophisticated refineries won’t touch it.
“All the talk now is whether the Iranians will choose to shut in production from those fields.”
Reuters quoted one source saying there were 12 Very Large Crude Carriers (VLCC) owned by the National Iranian Tanker Company around Kharg.
In addition, other sources said Iran has hired three other VLCCs from private owners, each capable of holding two million barrels for up to three months, and three Suezmaxes, each storing a million barrels for 70 days.
If all the tankers were completely full, as is widely believed, it would take storage levels offshore to some 33 million barrels, worth over $3 billion.
On top of the giant quantity of floating storage, Iran has also hired at least three private VLCCs on the spot market to ferry crude from Kharg Island to the Red Sea, some for consecutive voyages.
“Once they find buyers they funnel it up through the Suez-Mediterranean (SUMED) pipeline and sell it through Sidi Kerir to customers,” the shipping broker said.