Oil sanctions have Iran scrambling to store crude

With many countries scaling back imports of Iranian oil before sanctions tighten on July 1, the Islamic country is running out of places to store its crude.

This month the International Energy Agency (IEA) reported that up to 25 per cent of Iran’s oil production didn’t sell on the world market. With onshore holding tanks full, Tehran is storing around 36 million barrels in tankers anchored in the Persian Gulf.

While Iran vehemently denied the IEA report, experts estimate that more than half its ships are idle and being used as storage.

Some have turned off their GPS tracking beacons; they’re either at anchor or trying to secretly dodge sanctions on exports, imposed to stop Tehran’s nuclear ambitions.

It’s not just customers who are squeezing the regime. Most insurers, pressed by the U.S., have stopped underwriting leased tankers, and two major firms won’t certify Iran’s fleet as safe, something needed to enter foreign ports.

If sales don’t pick up soon, the IEA believes Iran will have to stop production of oil, the backbone of its economy.