As Washington prepares to renew sanctions against Iran’s energy sector next week, Iranian tankers are increasingly switching off their tracking systems, according to oil experts.
Leading oil officials, including Saudi Energy Minister Khalid al-Falih, say the tactic is clouding the world oil markets because other Organization of the Petroleum Exporting Countries (OPEC) are having trouble monitoring the daily output from Iran, which is OPEC’s third-largest producer.
“Nobody has a clue what Iranian exports will be,” Mr. al-Falih said late last month in an interview with Russia’s Tass news agency.
Analysts expect the situation to only worsen on Nov. 4 when sanctions kick in directly targeting countries that buy Iranian oil by blocking them from access to U.S. markets and financial institutions.
That has set off a scramble by some of Iran’s biggest energy buyers, including China and U.S. allies such as India and Turkey, to either get around the U.S. sanctions or make up the shortfall elsewhere.
The sanctions have triggered a black-market fueled by Iranian tankers — or “ghost ships” — that dismantle their vessel tracking systems, according to regional observers, making it extremely difficult to estimate how much Iranian oil is on the market at any given moment.
In May, before President Trump withdrew the U.S. from the nuclear deal, Iran was exporting roughly 2.5 million barrels per day (bpd). This month, according to Reuters, estimates of Iranian crude exports have varied by more than 1 million bpd, which is enough to cover Turkey’s oil demand.
On Sunday, Iranian Vice President Eshaq Jahangiri pledged to defy Washington stated goal of reducing Tehran’s oil exports to zero.
“Despite sanctions,” Mr. Jahangiri said, “Iran’s oil exports will not fall below a million barrels a day.”
Other Iranian oil officials, in addition to the National Iranian Oil Co. and National Iranian Tanker Co., have recently declined to specify the Islamic Republic’s daily export data.
The pressures pushed oil prices to a four-year high at the start of October with Brent crude oil selling for more than $86 per barrel.
Prices have since dropped to $77 a barrel, but industry analysts say they remain wary.
• Dan Boylan can be reached at dboylan@washingtontimes.com.
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