Iran storing 40 million barrels of oil at sea

London - Iran is storing as much as 40 million barrels of oil on supertankers at sea as it prepares for a sales drive if a nuclear deal can be sealed.

Iran and six world powers are seeking to overcome remaining differences with a looming self-imposed June 30 deadline to reach a deal over Tehran's disputed nuclear programme.

In the meantime, Iran has been parking oil off its coast, mainly on tankers belonging to its national carrier NITC.

Clear space

A former official at the state-run National Iranian Oil, Mehdi Varzi, said: "The first thing they will try and do is offload quite a lot of that storage. (Oil Minister Bijan) Zanganeh has already warned OPEC to make room. In other words, we are going to sell this oil at any price.

"Floating storage is there to be put onto the market as soon as possible after some sort of agreement," said Varzi, who now runs an energy consultancy in Britain.

Iran, once OPEC's second-largest producer after Saudi Arabia, is seeking to clear space for its gradual return to the market after years in which Western sanctions have halved its oil exports to as little as 1 million barrels per day (bpd).

The senior advisor on security of supply to the Swedish Energy Agency, Samuel Ciszuk, said: "It actually makes sense for them to go in fairly hard in order to reclaim market share and hope that high cost producers above them are inched out quicker."

Shipping sources and tanker tracking data showed over the past three months that Iran had deployed at least 15 very large crude carriers (VLCCs), each capable of carrying 2 million barrels, to store oil.

"The approximate 38 million barrels of Iranian oil in floating storage, in addition to shore based stocks, could quickly add supply to the market," tanker broker EA Gibson said in a report recently.

Tanker movements

Broker Poten & Partners estimated 17 VLCC tankers were being used to store Iranian oil.

A separate source, who tracks tanker movements, said Iran was storing over 45 million barrels of oil on 23 tankers including a few vessels that were not part of NITC's fleet.

"That compares with 25 million barrels stored on 12 to 14 tankers exactly a year ago, which is a major increase year-on-year," the source said.