Tehran: Iran will likely expand how much oil it's storing at sea as sanctions deter China, Japan and other buyers from purchasing the country's crude, according to RS Platou Markets.
The second-largest producer among the Organisation of Petroleum Exporting Countries had as much as 35 million barrels of unsold oil on tankers at the end of April, compared with 8 million a month earlier, the International Energy Agency said last week.
The glut at sea is expanding because Iran's biggest importers cut purchases by 1 million barrels a day last quarter, Frode Moerkedal, an Oslo-based analyst at Platou, the investment-banking unit of Norway's largest shipbroker, said by phone yesterday.
"A lot of it has to go to storage," Moerkedal said. "If no new buyers come in they'll have to store more and even have to cut oil production."
Shipments to China and Japan, the two largest buyers, are slumping as European Union and US sanctions targeting Iran's nuclear programme intensify. As much as half of the country's tanker fleet may be storing, the IEA, a Paris-based adviser to industrialised countries, said in a report on Friday.
Chinese imports
China, Iran's largest customer, imported about 350,000 barrels a day last quarter, 43 per cent less than in the last three months of 2011, customs data show.
Shipments to Japan, the second-largest, fell 30 per cent from a year earlier, according to the trade ministry.
Iran produced 3.3 million barrels a day of crude in April, making it the second-largest member of Opec, after Saudi Arabia, which had output of 9.8 million barrels a day, according to data compiled by Bloomberg.
Iranian storage is tying up the equivalent of 17 supertankers, Platou estimates. That effectively cuts the supply of vessels available to trade and boosts shipping costs, Moerkedal said.
