July 24, 2020
A major monitor of international oil shipments says Iran’s crude exports are down to only 10 percent of normal.
Those shipments went to China and Syria, which are not believed to be paying for any of that crude.
But at the same time, Lloyds Intelligence says Iran is quietly exporting some refined oil products that are labeled as Iraqi and quietly making money off those clandestine shipments.
Lloyds Intelligence said, “Deceptive shipping practices from offshore loadings from the Iraqi port of Khor az-Zubair reveal hidden cargoes of sanctioned Iranian fuel oil are being shipped to Malaysia and Fujairah.” Fujairah is one of the United Arab Emirates.
About 2.1 million tons of oil derivatives were loaded from the offshore port limit of Khor az-Zubair in January, Lloyd’s List Intelligence data show. Subsequently, the shipment was exported to the UAE and Malaysia, invoiced as Iraqi fuel oil.
Although fuel oil is not specifically sanctioned by the United States, when Iran sells the product directly to other countries it cannot receive US dollars in payment. This could be one reason why it uses Iraq as a conduit to export fuel oil.
Radio Farda said data provided to it by Kpler, one of the world’s main tanker tracking agencies, said crude oil exports from Iranian terminals totaled only 254,000 barrels a day in January and 248,000 barrels a day in February. Oil exports in the quarter century before harsh sanctions averaged 2.5 million barrels a day, so current exports are just 10 percent of normal levels.
What’s more, Syria gets Iranian crude on credit and doesn’t pay anything for it now, and China is supposed to get 250,000 barrels of crude a day in repayment for past debts. So, it appears Iran gets no income for those exports monitored by Kpler.
But the budget draft sent to the Majlis for the year starting on Now Ruz assumed Iran would be getting income from 1.5 million barrels a day of crude exports.
Iran also exports low-quality fuels directly. Radio Farda’s data provided by Kpler shows that the UAE has been the primary destination for two-thirds of directly shipped Iranian fuel oil, and one-tenth of the product was delivered to Malaysia.
After Iran opened the new Persian Gulf Star Refinery, it was expected that its direct fuel oil exports would increase, but apparently this did not happen, indicating that some exports are conducted indirectly through third parties.
Persian Gulf Star Refinery, also known as Bandar Abbas Gas Condensate Refinery, is being developed near Bandar Abbas. It has a processing capacity of nearly 360,000 barrels of gas condensate a day.
According to Lloyds, a spike in fuel oil exports from Iraq’s Khor az-Zubair export terminal accompanied by clandestine shipping practices used by tankers that load there reveal hidden flows of Iranian oil cargoes being shipped to the bunkering center off Fujairah and to floating storage off Malaysia.
Moreover, Lloyds has disclosed that, along with rising exports, there are increased numbers of tankers seen “going dark” — switching off their Automatic Identification System — while in the off-port loading area, suggesting ship-to-ship transfers are undertaken in this way to disguise the identity of the other ship and the cargo’s origin.