No tankers have loaded at Kharg Island, Iran’s main export terminal, for at least a week, recent shipping and satellite data show, suggesting that the renewed US naval blockade has brought Tehran’s crude oil sales to a halt, the Financial Times reported on Friday.
The US reimposed a naval blockade on Iranian ports in mid-July after an interim agreement to reopen the Strait of Hormuz collapsed.
Operations at Kharg Island, vital to Iran's oil industry, halted on July 31, according to Kpler and Energy Aspects, two intelligence providers for global energy, commodity, and shipping.
Satellite images revealed that all three berths on the island had been "empty for an extended period of time," maritime intelligence company Windward said.
On Tuesday, only 16 vessels were anchored in the waiting area around Kharg, added Windward, the lowest number since the beginning of last month.
About nine out of every 10 barrels of crude oil exported by Iran are loaded on the small coral island in the northern Gulf because much of the country's coastline is too shallow to allow large tankers to dock. "The blockade is effective, in the sense that there isn't much tanker traffic going in or out," said Richard Bronze, head of geopolitics at Energy Aspects.
However, Bronze said the loss of export revenue was not expected to put immediate pressure on Tehran to compromise in negotiations with the United States. "It's pretty clear that the Iranians feel they have the upper hand when it comes to Hormuz, and they are willing to absorb a great deal of economic pain to exploit their advantage," he said.
According to the FT, Iran continued loading tankers at Kharg throughout the six months of its war with the United States and Israel, making the current standstill one of the longest since the war began.
United Against Nuclear Iran (UANI), a Washington-based lobbying group that tracks Iranian oil shipments, said that since July 12, it had not identified a single tanker loaded with Iranian crude oil that had managed to leave the Gulf.
For now, Iran continues to receive revenue from cargoes that left the Gulf during the ceasefire and are only now reaching customers in Asia. According to UANI, 26 Iranian-flagged tankers have arrived in waters near Malaysia, where Iranian oil is commonly transferred between vessels before being delivered to refineries in China.
Tehran could benefit from rising oil prices, Bronze says
Bronze said Tehran could even benefit from rising oil prices before those barrels are eventually sold. In the coming weeks, however, that source of revenue is also expected to come to a halt.
"The sand is running out of the hourglass in terms of how long this will continue generating revenue," he said.
The blockade is also preventing Iran from replenishing its supply of empty tankers available for loading on the island. Vessels that have already unloaded their cargoes in Asia have not returned to Iranian waters. According to UANI, several are waiting off the coast of Sri Lanka, while others have been seen near Oman and Pakistan.
The price of Brent crude oil, the international benchmark, stood at just under $82 a barrel in London on Friday, as traders continued to await an agreement that would allow shipping through the Strait of Hormuz to resume.
Senior Iranian Foreign Ministry officials said this week that they had reached an agreement with Oman on the geographic coordinates of a new shipping route through the strait, but there have been no signs of progress since Wednesday. On that day, the sides said a joint statement was in the "final stages."
Tehran possibly reducing oil production
The halt in operations at Kharg has not yet led to a significant filling of the island's oil storage tanks, Energy Aspects noted. This could indicate that Tehran has already begun reducing oil production at its fields to avoid reaching a point where it has no storage space left.
Although the talks between Iran and Oman are being conducted bilaterally, a person briefed on the situation said that if an agreement acceptable to the parties is reached, the United States will lift the blockade and reinstate the oil sanctions waiver, allowing buyers to freely purchase Iranian crude oil, the FT said.