An investigation by Iran International has found that over half of the tankers recently sanctioned by the US for transporting Iranian oil have stopped operating outside of Chinese or Iranian ports, reports Iran International.
New Sanctions
Following similar US Treasury actions in late 2024, new sanctions were announced on February 24, targeting ultra-large crude carriers (VLCCs) involved in Iran’s shadow fleet. These VLCCs, crucial for Iran’s oil shipments due to their large carrying capacity (up to 2 million barrels), have been a focus of US Treasury sanctions since October 2024.
The latest sanctions from the Trump administration have blacklisted nearly two-thirds of the 126 VLCCs shipping Iranian oil, forcing many to cease operations with Iran and instead transport Russian oil.
Facing Hurdles
While stricter sanctions have created challenges for Iran’s oil transportation via VLCCs, it’s an overstatement to say exports face catastrophic disruption.
UANI has identified 503 tankers with a capacity of 61 million tons of oil, but current sanctions cover less than 45% of that capacity. Iran needs approximately 45 VLCCs to maintain its recent average daily oil transit of 1.3 million barrels. Currently, 47 VLCCs involved in Iranian oil smuggling remain unsanctioned.
Additionally, older VLCCs (over 20 years old, averaging $25 million each) are available for purchase by shadow fleet operators. The number of foreign tankers involved in Iranian oil smuggling has increased dramatically in the last five years.
China’s recent actions further illustrate the complexities. A January 2024 ban on sanctioned tankers at Shandong Port reduced Iranian oil offloading. However, a subsequent policy shift privatizing part of the port has allowed for increased offloading, with February discharges surging to over 1.7 million barrels per day, according to Kpler.
Iran’s Situation
While much attention is paid to the volume of Iran’s oil exports, the more critical factor, particularly for the US, is the revenue generated from those exports. Recent data suggests a significant discrepancy between export volume and revenue.
Although oil tanker tracking indicates a roughly 25% decline in export volume, Iranian financial data reveals a much steeper drop in oil revenue – a 50% decrease, falling below $1.8 billion monthly. This disparity suggests that the cost of circumventing US sanctions has become substantially higher for Iran.
This interpretation is supported by comments from Masoumeh Aghapour, an economic advisor to Iran’s president. On February 25th, following the latest round of US sanctions, she openly acknowledged the country’s severe foreign currency shortages, directly attributing the difficulty to US actions in the forex market.
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Source: Iran International
