Iran Is Ready To Flood The World With Oil
Iran reportedly has about 50 million barrels of oil floating off its coast in Iran-owned tankers, about half of which departed for Asian ports this month.
The problem for Iran is that it has no more than 60 tankers in its fleet. About half of them are parked for storage and another 20 or so are not seaworthy, at least not for sailing the open oceans. So all Iran has to do is rent foreign-flagged tankers, right?
There is just one problem: nobody wants to give their spare tanker capacity to Iran.I beg you to pardon me for a moment while I break down and cry that Iran can't make more billions of dollars to pay terrorists.
According to Reuters ship owners, who are not short of business in a booming tanker market, are unwilling to take Iranian cargoes.
One stumbling block is residual U.S. restrictions on Tehran which are still in place and prohibit any trade in dollars or the involvement of U.S. firms including banks – a major hurdle for the oil and tanker trades, which are priced in dollars.
As a result only eight foreign tankers, carrying a total of around 8 million barrels of oil, have shipped Iranian crude to European destinations since sanctions were lifted in January, according to data from the tanker-tracking source and ship brokers.
Furthermore, tanker companies are not standing in line waiting for Iranian bids.
Whether it is due to politics or simple business precautions, Paddy Rodgers, chief executive of leading international oil tanker company Euronav, said at present there was “no great urgency to do business in Iran”.
“There is not a premium to do business in Iran and there is plenty of other business – the markets are busy, rates are good. So there is no stress on wanting to do it,” he told Reuters. “I don’t really want to set up a euro bank account in Dubai in order to trade with Iran – that would crazy.”
Michele White, general counsel with Intertanko , an association which represents the majority of the world’s tanker fleet, said: “We have witnessed a reluctance by our members generally to return to Iranian trade given the prohibition on use of the U.S. financial system – essentially no U.S. dollars.”
One can almost smell Saudi intervention here, which we first described two weeks ago when we reported that not only has Saudi Arabia banned Iran from sailing in its territorial waters, but has taken proactive steps to slow Iran’s efforts at increasing oil exports, interfering with third parties and making Iran’s procurement of vessels virtually impossible.
| And then they told me that Iran can't ship their oil anywhere! |
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