Business Maverick: Iran may drain offshore crude oil cache if nuclear deal reached

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Progress towards an Iranian nuclear deal has thrown the spotlight onto a sizable cache of crude held by Tehran that could be swiftly dispatched to buyers in the event an agreement gets hammered out.

About 93 million barrels of Iranian crude and condensate are currently stored on vessels in the Persian Gulf, off Singapore and near China, according to ship-tracking firm Kpler, while Vortexa Ltd estimates the holdings at 60 to 70 million barrels. In addition, there are smaller volumes in onshore tanks.

The possible full readmittance of Iran to the global crude market, with the potential lifting of US sanctions, comes at a complex moment for oil traders. Investors are juggling the countdown toward far tighter European Union curbs on Russian crude flows from December as part of the bloc’s pushback against the war in Ukraine. In addition, the Biden administration’s mammoth sale from the Strategic Petroleum Reserve will end in October.

The focus for diplomats is the revival of a multinational accord that limited Iran’s nuclear programme in exchange for the lifting of related sanctions, including on oil flows. The original deal collapsed after then-president Donald Trump abandoned it.

While Iran may aim to fill the void left by Russia in Europe, namely in Spain, Italy, Greece and even Turkey, Tehran would also attempt to reclaim share in the prized Asian market, even if it takes a sweetening of terms, Driscoll said.

 

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