Iranian exports of crude oil and condensate accelerated last month as the threat of Israeli military action against Iran’s Kharg Island export terminals eased. But there are growing signs that tighter US sanctions on vessels involved in the trade are hitting home, with large quantities of Iranian crude building up in floating storage in Southeast Asia.
Iran has become extremely reliant on Chinese buyers, which now take around 90% of its oil exports, but US sanctions make the trade a complicated one. Crude oil is routinely loaded onto VLCCs, which transport the cargo to waters offshore Malaysia and Singapore – known as the EOPL (East Outside Port Limits) lightering area. From here, cargoes are unloaded onto smaller vessels, and other VLCCs, in ship-to-ship transfers, to be delivered to the final port for offloading. However, the US has recently sanctioned many of the vessels and firms involved in both legs of the trade (MEES, 18 October), and initial indications suggest it could be having an impact; at least until workarounds are implemented. (CONTINUED - 1045 WORDS)
