Iran stores more oil on land and at sea as exports slump

Iran’s oil storage on land and at sea is on the rise as US sanctions on exports bite and Tehran battles to keep its ageing fields operational and crude flowing, according to data and industry sources.

Washington announced in May the end of sanctions waivers for foreign countries importing Iranian oil, hitting Tehran’s biggest source of income.

With creaking infrastructure and an ageing fleet of ships due to increasing isolation from much of the world, Iran will need to park unsold stocks of oil until it can find buyers.

It is vital for Tehran to keep oil flowing as any disruption would damage its future activities due to the high costs and complexities of restarting production.

Data from Kayrros, a company which tracks oil flows, showed onshore storage in Iran was 46.1 million barrels, from total capacity of 73 million barrels, its highest since mid-january.

Iranian oil exports fell in May to 500,000 barrels per day (bpd) or lower, more than half the level seen in April, according to tanker data and industry sources.

Data based on AIS tracking

by shipping intelligence platform Marinetraffic showed 16 Iranian tankers, holding some 20 million barrels, were estimated to be used for floating storage after being stationary between two to four weeks.

Ten of those tankers with nearly 11 million barrels had been stationary for four weeks.

This compared with 12 Iranian tankers holding at least 13 million barrels of oil in March, which had been stationary from two to four weeks, Marinetraffic showed.

Analytics company Globaldata said Iran had planned investment of around $900 million in capacity additions on new build storage projects between 2019 to 2023.

Analysts have estimated that over 50 percent of Iran’s oil production comes from fields that are over 50 years old with billions of dollars needed to develop additional capacity. data