Oil Market Beware – Iran Awaits Nuclear Deal with 40 Million Barrels Stored at Sea - Maritime and Salvage Wolrd News

By Jonathan Saul

LONDON, June 15 (Reuters) – Iran is storing as a lot as 40 million barrels of oil on supertankers at sea because it prepares for a gross sales drive if a nuclear deal could be sealed.

Iran and 6 world powers are looking for to beat remaining variations with a looming self-imposed June 30 deadline to succeed in a deal over Tehran’s disputed nuclear programme.

In the meantime, Iran has been parking oil off its coast, primarily on tankers belonging to its nationwide service NITC.

“The first thing they will try and do is offload quite a lot of that storage. (Oil Minister Bijan) Zanganeh has already warned OPEC: make room for us. In other words, we are going to sell this oil at any price,” stated Mehdi Varzi, a former official on the state-run National Iranian Oil Co.

“Floating storage is there to be put onto the market as soon as possible after some sort of agreement,” stated Varzi, who now runs an power consultancy in Britain.

Iran, as soon as OPEC’s second-largest producer after Saudi Arabia, is looking for to clear house for its gradual return to the market after years by which Western sanctions have halved its oil exports to as little as 1 million barrels per day (bpd).

“It actually makes sense for them to go in fairly hard in order to reclaim market share and hope that high cost producers above them are inched out quicker,” stated Samuel Ciszuk, senior adviser on safety of provide to the Swedish Energy Agency.

Shipping sources and tanker monitoring knowledge on Reuters confirmed over the previous three months Iran had deployed not less than 15 very giant crude carriers (VLCCs), every able to carrying 2 million barrels, to retailer oil.

“The approximate 38 million barrels of Iranian oil in floating storage, in addition to shore based stocks, could quickly add supply to the market,” tanker dealer EA Gibson stated in a report final week.

Broker Poten & Partners estimated 17 VLCC tankers have been getting used to retailer Iranian oil.

A separate supply, who tracks tanker actions, stated Iran was storing over 45 million barrels of oil on 23 tankers together with a number of vessels that weren’t a part of NITC’s fleet.

“That compares with 25 million barrels stored on 12 to 14 tankers exactly a year ago, which is a major increase year-on-year,” the supply stated.

Two NITC tankers – Amber and Nancy – have been deployed for floating storage in latest weeks, monitoring knowledge confirmed. Among the non-NITC vessels getting used for storage are Iran-flagged tanker Daryakaran, monitoring knowledge confirmed.

OIL SALES RISE

The International Energy Agency (IEA) stated in a report final week that preliminary tanker monitoring knowledge confirmed Iran’s crude gross sales rose in May to 1.4 million bpd, up 235,000 bpd from April and have been at their highest since June 2012, the final month earlier than robust monetary measures have been imposed by Washington and Brussels.

“It is unclear how much, if any, of the May volume came out of floating storage,” the IEA stated. “Tehran is expected to target Asia for its additional crude if and when sanctions are lifted.”

While Zanganeh has stated Tehran would pump one other 500,000 bpd inside a month of lifting sanctions and as much as 1 million bpd inside six or seven months, most analysts consider will probably be months or as much as a 12 months for any important output enhance.

Iran’s tanker arm NITC, nonetheless blacklisted by the United States and the European Union, has a fleet carrying capability of over 76 million barrels of oil.

“In the context of the financial sanctions, there are still going to be problems on the insurance side,” the Swedish Energy Agency’s Ciszuk stated. “And from that point of view, it will be very important for Iran to have as many tankers of their own ready to go and ready to deliver.” (Editing by William Hardy)