Iran Tanker Update: June 2020

Iranian exports of crude and condensate fell in June to their lowest since February 2020. According to Bloomberg, the total observed shipments of crude and condensate were 133kb/d in June compared to 293k b/d in May. 

The majority of Iran’s exports in June went to China.  However, customs statistics records show that imports are down 62% from last year. Since the beginning of 2020, Iran exported an average of 82k b/d to China, also down 87% from the same period last year.

Despite the decline, UANI is tracking several vessels delivering to China, as Iran turns to more trickery to evade U.S. sanctions. The Very Large Crude Carrier (VLCC) HASNA “reappeared” (switched on its satellite tracker) on June 7 off the Indonesian archipelago for the first time in nearly a year and took an eccentric route to deliver its crude. A regular path would be to sail through the Malacca Strait.  HASNA, by contrast, sailed through the Bali Sea, then the Makassar Strait before reaching a location slightly north of Singapore.  As the below graphic shows, this adds several thousand miles to the journey:

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

According to Tanker Trackers, HASNA took the longer route because the Iranians were determined to minimize any risk of U.S. naval encounters, which is heavy in the Singapore Strait.  HASNA was carrying heavy sour crude oil loaded in March from Iran’s Soroosh offshore oilfield. Due to the shortage of heavy sour crude oil, Iran was especially keen to avoid any confrontation. On June 16, HASNA switched off its AIS signal to engage in a ship-to-ship (STS) transfer. Four days later, HASNA came back online, returning to Khark, Iran. Meanwhile, its original contents presumably continued to China.

Iranian Suezmax-sized vessel SONIA I appeared off the coast of Singapore on June 2 with a draft of 15.5 and signaled its destination as Zhoushan, China.  SONIA I disappeared on June 2 and reappeared on June 5 with a draft at 9.5, indicating it had offloaded its contents. Three days is insufficient time for SONIA I to have traveled to China, so it is likely the vessel engaged in a STS transfer during the period its AIS satellite signal was turned off. 

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

Iranian Suezmax SOBAR also appeared in the Strait of Malacca on June 3 with a draft of 16.7, signaling its destination as China. SOBAR disappeared (“went dark”) off the coast of Malaysia on June 5. 

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

Similarly, SOLAN appeared and disappeared off the coast of Singapore on June 2 with a draft of 17.5, also signaling its destination as China.

(Sources: Bloomberg L.P., Mapbox, OpenStreetMap)

On May 14, 2020, the U.S. published a global advisory highlighting the common deceptive shipping practices used by Iran. As the U.S. continues to apply pressure on Iran, Iranian maritime tactics are becoming more sophisticated.  Iranian vessels are taking more circuitous, “scenic” routes to avoid any possible U.S. Navy encounters and ensure delivery. The tankers are also engaging in clandestine ship-to-ship oil transfers, changing names and ownership, and disappearing for long duration before re-emerging with missing satellite data. As Iran continues to engage in these deceptive practices, it is important for ship owners, managers, operators, brokers, ship chandlers, flag registries, port operators, shipping companies, freight forwarders, classification service providers, commodity traders, insurance companies, and financial institutions to ensure they are doing enhanced due diligence to mitigate exposure to sanctions risk.