Iran Keeps Loading Oil Onto Tankers Even as USA Blocks Route

Iran is continuing to load millions of barrels of oil onto supertankers, an activity that will only become increasingly difficult if the US keeps up a blockade on Tehran’s shipping.

Images from the European Union’s Sentinel 1 satellite, captured on Monday, show one very large crude carrier that’s capable of hauling about 2 million barrels of oil, moored at the jetty on Kharg Island. An earlier image from Saturday showed no ships moored at Kharg.

With no evidence of large volumes of oil circumventing the US blockade, the loaded crude is likely filling up tankers Iran has available in the region. Monday’s image shows 13 ships, most of them VLCCs, anchored to the east of the island. An image from the day before the blockade started on April 13 shows about half that number.

The US said its maritime barrier in the Sea of Oman has stopped almost three dozen Iranian vessels from passing, keeping crude from the Islamic Republic reaching customers. As President Donald Trump’s administration tries to slash oil revenue that’s crucial for Iran, market watchers are looking for evidence on how long Tehran can maintain production.

Iran has attempted several times to break the American blockade. The US Navy says it intercepted at least two supertankers in the Gulf of Oman and the Arabian Sea this week. It has forced those and other ships to turn around and head to an Iranian port, with a build-up of oil tankers and other vessels seen off the Iranian port of Chabahar, close to the border with Pakistan.

US forces also boarded a tanker called Majestic X that was carrying Iranian oil in the Indian Ocean this week, days after targeting the Tifani carrier when it was mid-way between Sri Lanka and the Strait of Malacca. Both vessels are sanctioned by the US and their seizures show the blockade is extending far beyond the Gulf of Oman.  

Iran has been the only major oil exporter out of the Persian Gulf since the war in the Middle East started in late February, after Tehran effectively closed off the Strait of Hormuz to other maritime traffic. Lower shipments will also hit Tehran’s oil revenue, the backbone of the country’s finances.

The US actions are likely to eventually force Iran to curtail production if tankers are unable to transit. The move “would constrain volumes mechanically, not just financially, leaving far less room for workaround trade, and, over time, forcing Iran to curtail production,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in the note dated April 21.

But the process won’t be quick. Iran has 90 million barrels of available storage and could maintain oil production at current levels of about 3.5 million barrels a day for another two months, even if the US blockade succeeds in halting the country’s exports, FGE NexantECA said in a note.

“They’re getting tankers filled up, that does give them additional time,” said Miad Maleki, a former US Treasury official who worked on sanctions policy in Trump’s first term, and is now a senior fellow at policy institute Foundation for Defense of Democracies. “So that kind of gives them a relief from running out of storage” for a period of time.

Most tankers hauling Iranian barrels routinely sail with their automatic position signals disabled. Even before the latest conflict, most ships linked to Iran stopped sending signals as they headed into the Strait of Hormuz to enter the Persian Gulf. They generally didn’t enable them again until well into the Strait of Malacca, about 13 days sailing from Kharg Island.

Tankers seeking to run the US blockade would be likely to adopt a similar tactic, so it may take another week or so for any ship that has succeeded in getting past the US Navy, if any do, to appear on tracking screens.