Bloomberg News

Iran-0wned Tankers Storing Crude Falls to Two-Year Low, E.A. Gibson Says

March 02, 2012

The number of Iranian tankers used to store oil at sea slid to a two-year low as more of the ships were deployed to carry crude to Asia before the U.S. and Europe tighten sanctions on exports, said E.A. Gibson Shipbrokers Ltd.

Four very large crude carriers, each able to hold 2 million barrels, are in use to store Iranian oil, down from 16 at the end of last year, the London-based shipbroker said today in a report. That’s the lowest monthly total since the start of 2010 and may signal a change in the country’s policy on transporting crude to customers, Gibson said.

The decline may stem from a halt by tanker owners to carrying crude from Iran before sanctions that ban insurance coverage for any ships calling at the Persian Gulf country begin July 1, according to Gibson. That’s the date a European Union embargo on the country’s oil takes effect.

“This may have left a void which has necessitated the use of Iranian-controlled very large crude carriers to move more cargoes, which could account for their increase in activity,” Gibson said. “It may also be a decision by Tehran to offload as much crude as possible ahead of the impending sanctions.”

Floating Storage

NITC, an Iranian owner of at least 26 VLCCs, has used as many as 25 of the vessels at any one time to store crude over the past two years, according to Gibson. About 12 were used on average over 2011 for floating storage, the broker estimated, citing vessel-tracking data.

Most of the crude shipped to India in January was carried on NITC tankers, according to Gibson. India was the largest buyer of the oil that month, analysis from Lloyd’s List Intelligence, a unit of London-based Informa Plc, showed. Some NITC vessels are going to China, Taiwan and Singapore, while the destinations of others recently loaded with crude for export were unknown, said Gibson.

NITC’s ability to continue transporting crude on its vessels after July can’t be determined, and some of the fleet may have to be idled, particularly if China cuts imports, the shipbroker said. The nation is the world’s second-biggest consumer of crude after the U.S.

China imported 2 million metric tons of oil in December, the latest month for which figures are available, compared to an average of 2.3 million tons in 2011, data show.

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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