Sanctions Creating Oil Stockpile as a Dozen Iranian Supertankers Now Storing Oil

LONDON (Dow Jones)–Iranian oil stored at sea is building up due to international sanctions but the measures are also proving a boon to its home-grown tanker operator, officials in Tehran said Tuesday, underscoring the mixed effect of mounting pressure on the country.

Half of the 25 Very Large Crude Carriers owned by oil tanker company NITC are now storing oil instead of exporting it, an Iranian shipping official said.

“They are being chartered by [the state-owned National Iranian Oil Co.],” he said.

It emerged last month than Iran’s crude exports had declined by at least 14%–the first such drop this year. The decline came as the west is ratcheting up pressure on Iran’s nuclear program.

The number of large tankers now storing oil at sea appears to have doubled from a month ago. According to data from major brokerage ICAP the number of NITC supertankers storing oil at sea stood at six on March 23, half of them being long-term storage. It remains to be seen, however, if the oil currently stored will remain idle for an extended period or if it is only temporarily immobilized.

-By Benoit Faucon, Dow Jones Newswires