Iran Tanker Update – April 2020: Iran Turning to Floating Storage to Cope with Demand Contraction

May 4, 2020 | Claire Jungman and Daniel Roth

Iran’s observed exports of crude oil fell by more than half in April with just three tankers confirmed, compared to ten in March. According to Bloomberg Tanker Tracking, the total observed shipments of crude were 204k barrels per day (b/d) in April, vs. 440 b/d in March.

Through April, UANI noted several Iranian tankers turning on their satellite transponders (AIS) after long periods off, up to one year.

Floating Storage

Even though global demand for oil has slowed to a trickle due to the coronavirus pandemic,  Iran cannot afford to turn off the spigots for its most lucrative revenue source. Even selling at a discount, Iran is (for now) running out of customers and it needs somewhere to store the excess. While the smaller sized vessels continue to deliver oil to Syria via the Suez, Iran has turned to storing the extra oil that would have normally been delivered to China in its Very Large Crude Carriers (VLCC).

Sanctioned National Iranian Tanker Company (NITC) tankers that are likely being used as temporary, stationary floating storage include:

  • DREAM II – Appeared full of crude oil in the Gulf of Oman on April 28 after ten months with its AIS turned off.

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

  • HILDA I – appeared full of crude oil in the Gulf of Oman on April 23 after seven months of its AIS turned off.

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

Ship-to-Ship Transfer

In other developments, NITC vessel ARK III, which had not been seen since December 2019, appeared at a Ship to Ship (STS) location off the coast of Indonesia on April 14. We flagged this location as a new area for Iranian STS transfers in our December 2019 blog. 

On April 14, ARK III engaged in a STS transfer with the Panama-flagged Crude Oil Tanker ANASTASIA I. According to publicly available shipping information, ANASTASIA I is operated by the Indian company Onyx Tanker Ship Management. ANASTASIA I has remained anchored in Indonesia since the STS transfer. 

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

Despite the increasing use of floating storage, Iran has continued exporting quantities of crude to China, specifically to the port of Huizhou, China. NITC VLCC HERO II appeared in the Strait of Hormuz on April 9 and then in the Strait of Malacca on April 23 with a draft indicating it was full of crude oil. HERO II appeared at Huizhou, China on April 30 with a lower draft indicating it had discharged its contents.

It will be interesting to track what Iran does if global oil demand continues to shrink for the next few months.

Vessels cited: HILDA I (IMO: 9357389; DREAM II (9356593); ARK II (9187655); ANASTASIA (9200964); HERO II (9362703); DORE (9357717)