Looming US sanctions force Iranian oil tankers to ‘go dark’
Analysts at a new watchdog in Stockholm, which monitors global oil shipments, have been run ragged by Iran’s attempts to avoid US sanctions this month.
Late last month, every one of Iran’s vessels “went dark”, switching off their transponders to avoid international tracking systems, in a first since TankerTrackers.com began operating in 2016. The ships can only be tracked manually using satellite imagery.
“It’s the first time I’ve seen a blanket blackout. It’s very unique,” TankerTrackers co-founder Samir Madani said.
It is part of attempts by Iran and its customers to keep oil flowing before a new US embargo, which is set to start tomorrow.
“Iran has about 30 vessels in the Gulf area so the past 10 days have been very tricky but it hasn’t slowed us down,” TankerTrackers co-founder Lisa Ward said.
Iran hopes less transparency will allow it to keep selling oil after November 5 when the US reimposes the last set of sanctions lifted under the 2015 nuclear deal, which Washington abandoned in May.
But Joel Hancock, from analysis company Natixis, said this did not mean their sales would remain high.
“The main issue with tanker trackers is they are tracking exports, maybe not sales,” Mr Hancock said. He said that the ships could just be moving oil to storage in China or elsewhere.
Another method, used between 2010 and 2015, is to keep oil on huge tankers off the Gulf coast.
TankerTrackers says there are six vessels with a capacity of 11 million barrels parked offshore as floating storage containers, freeing up port capacity and allowing for quick deliveries.
Although precise figures are rarely available in the opaque oil market, most analysts say Iran’s exports dropped from about 2.5 million barrels a day in April to about 1.6 million last month.
Countries with close security and trade ties with the US were quick to cut their purchases. South Korea went almost straight to zero, with Japan and much of Europe close behind.
“The vehicle is dead in the water. It can’t handle oil in any serious volume,” said Henry Rome, a specialist on Iran sanctions for the Eurasia Group consultancy in Washington.
Even if Iran can continue to sneak oil out of its ports, it will find it difficult to get the cash into its accounts.
“Iran is a formidable adversary, well practised in different techniques to keep selling oil and muddle the data, but that won’t be a remedy for everything,” Mr Rome said.