Iran holds 69 million barrels of oil ready for when US sanctions end

Iran will hold 69 million barrels of oil when US sanctions end

Iran may have 69 million barrels of oil in floating storage waiting for tankers to go to buyers if US sanctions on its crude oil exports are lifted, EA Gibson Shipbrokers estimates quoted by Bloomberg showed on Tuesday.

Citigroup also has a similar estimate for Iran’s floating storage facility. In a statement on Monday, the bank said Iran could potentially store around 65 million barrels of oil at sea and another 54 million barrels on land.

The United States and Iran have been holding indirect talks in Vienna since last month on possible ways for both countries to revert to the so-called Iranian nuclear deal. US President Joe Biden has signaled his willingness to return to the nuclear deal, but only if Iran fully resumes its nuclear activities. For its part, Iran has announced that it will only comply with the nuclear deal if the US lifts sanctions against Tehran.

If a deal is reached and US sanctions lifted, Iran could “ship oil to key export markets such as India and China in 10 to 20 days,” Citigroup said on its Monday note, co-sponsored by Bloomberg.

However, after US sanctions are lifted, Iran’s floating crude oil will not be evacuated overnight, Gibson Shipbrokers research director Richard Matthews told Bloomberg. The payment channels and all other formalities must also be cleared before buyers regain confidence that they would legitimately buy Iranian oil. Hence, clearing Iran’s crude oil supply is likely to take months, with a gradual surge in activity, Matthews told Bloomberg.

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