Iran's supply of crude oil stored offshore in Southeast Asia is quickly running out due to a U.S. maritime blockade that stops new shipments from leaving the Persian Gulf. This information comes from recent tracking data released by United Against Nuclear Iran (UANI).
According to UANI, around 9 million barrels of Iranian crude were transferred through ship-to-ship operations near Malaysia in September, which indicates that pre-blockade reserves are being used up. They estimate that only about 10 million barrels of Iranian crude are still stored around Malaysia's Eastern Outside Port Limits (EOPL).
This decrease suggests that one of the few remaining options Iran had against the blockade is nearing depletion.
While Iranian crude already outside the Persian Gulf can still be moved between tankers, UANI reports that no new Iranian crude has crossed the U.S. blockade since July 14.
“Since no Iranian crude has crossed the blockade line, the floating storage in the South China Sea is diminishing quickly,” the group stated.
Iran’s oil exports were nearly halted in September. UANI tracked just three Handymax tankers that crossed the blockade line during this month, carrying a total of about 1.52 million barrels of Iranian LPG and methanol, which averages to about 50,789 barrels per day.
Satellite monitoring indicated that there were no crude oil loadings at Iranian export terminals in September. Any loading that did happen mainly involved LPG, naphtha, and fuel oil.
UANI calculates Iranian exports by counting the number of ships crossing the U.S. blockade line instead of when they load cargo. Their data revealed that Iranian exports dropped from 966,133 barrels per day in July to 49,677 bpd in August, and slightly increased to 50,789 bpd in September. China, which has traditionally been Iran's largest crude buyer, received no new shipments during September based on UANI's tracking.
This situation has increased the significance of the oil that is already stored outside of Iran.
UANI noted that they observed eight ship-to-ship transfers in the Malaysian EOPL during September, with six of these involving Iranian crude and two involving LPG. The total crude transferred was about 9 million barrels, which is expected to go to Chinese independent refiners, often referred to as "teapots."
This activity continued even as scrutiny increased on the network of sanctioned and Iranian-linked vessels operating in the area.
UANI reported that Malaysian authorities took targeted enforcement actions around the EOPL shortly before their field investigation in September. At least 25 so-called ghost fleet tankers left the area, although about 20 remained.
Some of the vessels seem to have simply relocated their operations further north.
The Iranian-flagged tanker Hilda I carried out a transfer of Iranian crude south of Zhuhai on September 17, while Happiness I conducted another transfer south of Hong Kong on September 22. Other ships moved to anchorages further north in the South China Sea following the increased enforcement in Malaysia.
Iran's tanker fleet is also spreading out more.
UANI reported that 20 empty Iranian-flagged tankers were lingering off Sri Lanka at the end of September after leaving the Galle anchorage. Another tanker, Diona, remained off Duqm, Oman, as all vessels were unable to return to Iranian ports due to the blockade.
The reduction in offshore storage is occurring just as oil exports from other Persian Gulf countries are rebounding.
Based on data from Kpler and Vortexa, UANI indicated that crude exports from major Middle Eastern producers averaged 18.3 million barrels per day in the last week of September, marking the highest level since the conflict began in February. This recovery has been largely driven by Saudi Arabia and the United Arab Emirates.
UANI also noted that the extent of this recovery was initially hard to see because some tankers had their Automatic Identification System transmitters turned off while passing through the Strait of Hormuz, making it difficult to track traffic through the Strait solely with AIS data.
For Iran, however, the situation is moving in the opposite direction.
If UANI’s estimate of about 10 million barrels still in Malaysian floating storage is correct, the amount of crude oil available outside the blockade has dropped significantly. With no new crude reaching these offshore stocks, continued deliveries to China will increasingly depend on using a limited reserve rather than replenishing exported barrels.