Iran has taken to storing more and more crude oil inside tankers at sea.

The firth largest global producer of oil has increased its fleet of tankers by 8 since the end of March leaving them with a total of 19. This however is a subtotal of the whole fleet. Iran has 19 VLCCs (very large crude carriers) although they have also added a smaller vessel, namely a Suezmax tanker (so called as it is the largest size that can navigate the Suez Canal) to the mix.

Each of the VLCCs has the ability to store up to an amazing two million barrels of crude, where as the Suezmax tanker can hold half of its larger friends at one million. In theory this means Iran could be storing up to 39 million barrels of their sour product at sea.

When questioned about the amount of surplus stock, Iran has confirmed there is oil held in their tankers but have not given an idea as to exactly how much of the commodity is floating, waiting to be purchased.

It seems quite obvious there are more than a few barrels spread across the fleet, as to do otherwise would be far from cost effective to the exporters. There have been talks that Iran has encountered problems selling its surplus sour stock. Iran has expressed their opinion of this, blaming the inability to relieve itself of the crude on the normal decline in demand that is seen during the second quarter of the year. They have also said that recent oil refinery overhauls have contributed to the need for the extra storage vessels they have invested in.


In comparison to sweet crude which is light in sulphur content, the Iranian sour is a more costly crude to convert into fuel suitable for the consumer. Iran has said there are not as many as 20 vessels within their current fleet, although this is referring only to the VLCCs, with the addition of the Suezmax they do have 20, that we are aware of. There have been queries as to why the crude is not being sold off at a lower price. Some believe they could easily sell the surplus barrels at prices of $75-$80 a barrel. There have been rumours that crude may fall to $60-$70 a barrel in the near future, we live in hope but do not expect it to happen.

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