Bloomberg: Iran Begins to Store Oil in Supertankers

Iran is starting to store oil on its fleet of supertankers again, as impending US sanctions force the Persian Gulf country to revive a strategy it deployed under previous curbs.

The buildup of crude in floating storage signals the Iranian government is getting ready for the reimposition of new sanctions by US President Donald Trump on the Persian Gulf country’s oil. 

The measures are due to start in early November but buyers, including France, South Korea and others, have already started to cut back sharply, Bloomberg reported.

“We can expect floating storage to increase under the growing impact of US sanctions in the coming months,” Harry Tchilinguirian, the head of commodity-markets strategy at BNP Paribas SA, said from London.

So far, most of the ships in question—all of which are Iranian owned—have only been holding crude at sea for a few weeks, rather than for months at a time as they did during the 2012-16 sanctions, tanker tracking compiled by Bloomberg show. 

Almost all the main customers purchased fewer Iranian barrels in August than they did in April, the month before Trump said sanctions would be reimposed.

At least five full crude tankers have anchored off the Iranian coast over the past two-and-a-half weeks. Two holding condensate, a light oil produced at Iran’s natural gas fields, have been idling for weeks off Dubai. Trump is trying to cut off Iran’s oil exports to deprive the third-biggest member of the Organization of Petroleum Exporting Countries of income. 

In May, he pulled out of a 2015 pact that eased sanctions in return for Iran slowing its nuclear program.

Buyers who defy the US sanctions risk having their banks frozen out of the American financial system.