OIL: Iranian Floating Storage Building as Sanctions Hit

Iran’s crude oil and condensate exports dropped by 133 kbd m/m in December to 1.63 Mbd according to Kpler tracking as the impact of sanctions took hold.

• The sanctions are impacting vessel capacity mainly on two-part journeys while a number of Chinese energy related firms are showing a reluctance to deal with Iranian barrels.
• Around 22 Mbbls of Iranian crude have sat on the water for more than seven days, with two-third of them floating near Malaysia and Singapore its tracking shows.
• Onshore Iranian crude inventories have also piled up due to the shipping clog, reaching an eight-months high of 54.69 Mbbls last month.
• Iranian prices have firmed on constrained capacity which has also dissuaded Chinese buying. China pulled in 1.27 Mbd in December, down for a second month, while prices soared to around -$1.5/bbl against ICE Brent on a delivered basis, a level last seen in June 2022 Kpler said.
• China has been seen shifting attention to non-sanctioned sellers in WAF, the Middle East and Brazil.

Iranian Oil Floating Storage by Current Location, Mbbls

Source: Kpler