Page 36 - IRANRptJun19

had been stationary for four weeks.
This compared with 12 Iranian tankers holding at least 13mn barrels in March, which had been stationary from two to four weeks.
If Iran wants to buy more tankers for storage purposes, it again faces the challenge of overcoming US sanctions.
“Apart from these vessels, of late there is indeed a rising trend of more Iranian tankers switching off their AIS trackers,” Svetlana Lobaciova, a senior market analyst with Gibson, was quoted as saying, adding: “However, at this stage we can not say with any degree of certainty whether these units are simply sitting empty or storing or continuing to trade.”
“Iran has been using storage facilities in China, and could also try using storage facilities in neighboring Oman for example. However, if the US targets such external storage options with sanctions, it will create serious problems and infuriate Iran,” Farzin Nadimi, an associate fellow with the Washington Institute for Near East Policy think-tank, was cited as saying.
Turkey appears to have closed its ports to Iranian oil, reports indicated on May 21. That would mean Ankara is fully complying with the US drive to cut Iran’s crude shipments on the world oil market to zero—but the move would fly in the face of rhetoric from the Erdogan administration in which officials said they were not accepting a scenario in which Turkey is deprived of its right to import oil and gas from its neighbour. Iran, of course, has openly said that it is maximising efforts to sell oil on the grey market and the possibility remains that some consignments moving under the radar are making it to Turkey. But Ankara, which would not want to see yet another row with Washington undermine its already brittle capital markets, may, for now at least, be toeing the line.
A Reuters report suggested Turkey has replaced Iranian oil with crude from Iraq, Russia and Kazakhstan since the US announced it would not tolerate any Iranian oil exports from the start of May.
Turkey’s largest oil refiner, Tupras, which consumes almost all of the country’s oil imports, has reportedly used its play book from 2012-2013, when earlier US sanctions on Iran forced it to ramp up supplies from Iraq and Russia, an oil industry executive who requested anonymity told the news agency, adding: “It is the same story...This time they are importing more Kazakh oil though.” Kazakh import volumes hit a 20-year high in February, he was cited as saying.
Petroleum processing capacity at Iran’s Persian Gulf Star Refinery has reached 400,000 b/d and another 140,000 b/d is achievable by the end of this year, Mehr News Agency reported on May 5.
Iran refines the majority of its petrol at the refinery in the south of the country at which three phases are operational. A fourth phase is to be completed later this year by Khatam al-Anbia, the construction arm of the Islamic Revolutionary Guard Corps (IRGC). That will take petroleum production capacity up to 540,000 b/d.
The third phase at the refinery went operational in early January.
Iran has achieved self-sufficiency in petrol production, but prior to the construction of Persian Gulf Star Refinery it had for years struggled to meet domestic fuel needs because of a lack of refining capacity and international sanctions that limited the supply of spare parts for plant maintenance. Subsidies make its gasoline some of the cheapest in the world. However, the government is concerned that smugglers who transport cheap fuel to neighbouring countries are increasingly exploiting the situation.
Lately, several news agencies have reported the government was planning to start rationing petrol to 60 litres per vehicle per month. But Iran’s Oil Minister
36 IRAN Country Report June 2019 www.intellinews.com