‘Iran stores 14m barrels oil on ships in Gulf’

Iran is storing at least 14 million barrels of crude on supertankers in the Gulf, a tanker industry source said on Wednesday, in a strong sign Tehran was complying with an OPEC pledge to cut supply.

The source said that a week ago, Iran had stored up to 20 million barrels of crude on ten Very Large Crude Carriers (VLCC) in the Gulf, but had since released three of the ships back on to the market. “We now count seven VLCCs used for floating storage with most filled in January and February. One has been there since November,” said the source, linked to one of the world’s biggest oil tanker operations.

He said the big ships, moored around Kharg Island, were all owned by the National Iranian Tanker Company and were fully laden with heavier sour grades of Iranian crude.

“They’ve also used a couple of third-party vessels in the past, but those are back in the market as well,” he said. “The Iranians have done this kind of thing for at least two years and possibly more. They store and release, store and release, that’s the familiar pattern,” he said.

Last year, Iran, OPEC’s second biggest producer, placed some 20 million barrels of crude, mostly Soroush and Nowruz grades, in floating storage because it was having difficulties finding buyers.

Analysts at Lloyd’s Marine Intelligence Unit (LMIU), a shipping consultancy that estimates seaborne exports by tracking tankers, corroborated the new floating storage estimates.

“All I can tell you right now is that it’s single figures, but more than three or four — at the high end of single figures certainly,” said James Davis, a senior analyst with London-based LMIU.

“There’s definitely been a build up of vessels used for storage, around Kharg Island and the wider Gulf, which fits with the need to cut exports,” he said.

He also said Iran appeared to find it easier to store supplies or exports instead of taking down production.

The Organization of the Petroleum Exporting Countries cut its output by 1.2 million barrels per day from Nov. 1 and by a further 500,000 bpd from Feb. 1. 

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