Iran resorts to floating oil storage as buyers retreat

Build-up of crude offshore signals effectiveness of new US sanctions on Tehran

Iran is starting to store oil on its fleet of supertankers again as impending US sanctions force the country to revive a strategy it deployed under previous curbs.

The build-up of crude in floating storage offshore Iran signals the effectiveness of the new sanctions imposed by US President Donald Trump on Tehran’s oil. The measures are due to start in early November, but buyers including France, South Korea and others have already started to cut back.

“We can expect floating storage to increase under the growing impact of US sanctions in the coming months,” Harry Tchilinguirian, head of commoditymarkets strategy at BNP Paribas SA, said from London.

So far, most of the ships in question — all of which are Iranian owned — have only been

We can expect floating storage to increase under the growing impact of US sanctions in the coming months.” Harry Tchilinguirian | Head of commoditymarkets strategy at BNP Paribas

holding crude at sea for a few weeks, rather than for months at a time as they did during 2012-2016 sanctions, tanker tracking compiled by Bloomberg show. Almost all Iran’s main customers purchased fewer Iranian barrels in August than they did in April, the month before Trump said sanctions were being reimposed.

At least five full crude tankers have anchored off the Iranian coast over the past twoand-a-half weeks.