September 01, 2022 | Claire Jungman and Daniel Roth
As a final nuclear deal creeps into view, many analysts predict an immediate boost to the global oil supply as Iranian crude comes back online. Some analysts estimate that “Iran has about 150 to 200 million barrels of crude and condensate floating on the water” which would become available almost immediately. Meanwhile, a draft agreement would purportedly see the U.S. permit Iran to sell 50 million barrels in a “one-time sanctions exemption” just 60 days after “Day Zero” of a new deal. Ultimately, Iran could add an additional 900,000 barrels per day (bdp) into the system, rising up to as high as 2 million bpd thereafter.
The likelihood that Iran will maximize the potential profits of this windfall is dependent on the viability of its tanker fleet. Notably, the average age of a National Iranian Tanker Company (“NITC”) vessel is 19 years old, whereas tankers are usually broken down after 20 years. Thus, the Iranian fleet is approaching the time for scrapping - not transporting. Given the age of its fleet, Iran could even struggle to obtain the insurance coverage necessary to ferry its glut of post deal oil to buyers around the globe.