Reuters: Significant Surge in Unsold Oil Reserves of Iran and Russia

Following the sanctions on dozens of oil tankers carrying oil from Iran and Russia in recent months, Reuters reported a significant surge in the unsold oil reserves of these two countries. According to statistics from the commodity information company, Kpler, between 10 to 20 million barrels have been added to Iran's floating oil reserves since the beginning of this year. Kpler estimates that 80% of Iran's oil reserves are stored in tankers anchored in the waters of Singapore and Malaysia. Richard Bronze, head of the geopolitics section at the energy consulting firm, Aspect, also pointed to ongoing oil smuggling tactics such as deactivating and falsifying messages from the automatic identification system of tankers and conducting ship-to-ship transfers of oil cargoes by these two countries. He adds that this means the volume of unsold oil from Iran is likely greater than estimates, and the energy consulting firm, Vortexa, also indicates that Iran's unsold oil volume has exceeded 73 million barrels. The United States has sanctioned more than 50 tankers carrying oil from Iran and Russia since October last year when Iran conducted its second extensive missile attack on Israeli territory, disrupting Iran's oil transfer. On the other hand, China announced early in January this year a ban on the entry of sanctioned vessels into the Shandong port, which receives a significant portion of the sanctioned oil from Iran, Russia, and Venezuela. The tanker leasing company, Braemar, told Reuters that 57% of the 126 large tankers involved in smuggling Iranian oil have been sanctioned by the U.S. Kpler states that the Islamic Republic is struggling to find new non-sanctioned tankers for oil transfer. Previously, the tanker tracking company, TankerTrackers, along with Kpler, told Radio Farda that the volume of Iranian oil exports in the last month increased slightly compared to late 2024, reaching about 1.6 million barrels. Vortexa also reported to Reuters that Iran had a daily oil export of 1.78 million barrels in January. The report adds that the increase in Iranian oil exports and the inability to sell it to Chinese customers have led to a significant increase in Iran's floating oil reserves. Recently, Donald Trump, the new U.S. President, signed an order to revive the 'maximum pressure' policy against the Islamic Republic, aiming to bring Iran's oil exports to 'zero,' although he expressed hope that this lever would not need to be used. Homayoun Falakshahi, a senior expert at Kpler, told Radio Farda that if U.S. pressures on China, Iran's only oil customer, are effective, Iran's daily oil sales could decrease by half a million barrels in the coming months. Iran's oil exports fell to 350,000 barrels in 2020, the last year of Donald Trump's previous presidency. Reuters also cites oil trade sources saying that Iran has reduced oil discounts to Chinese customers to 50 cents (compared to Brent crude), while two months ago this figure was $2.5. The U.S. Treasury Department sanctioned 183 tankers carrying Russian oil to China and India on January 22, which included eight vessels also involved in smuggling Iranian oil. Following the sanctions on these tankers at the end of Joe Biden's administration, unsold oil reserves in Russia surged significantly. Kpler's estimates show that Russia's floating oil reserves exceeded 88 million barrels on January 27 this year, a 24% increase compared to January 10. Meanwhile, the cost of leasing tankers for transporting Russian oil to China has tripled since the recent broad U.S. sanctions against tankers, peaking at $4.5 million, and the insurance costs for oil cargoes have also surged. Reuters writes that some tankers previously involved in clandestine oil transport from Iran have shifted to transporting Russian oil, increasing pressure on the Islamic Republic to transfer oil to China.