
Iran International reports that Iran is trying to liquidate millions of barrels of oil stored in Chinese ports to prevent economic damage from anticipated sanctions under the incoming Trump administration.
Sanctions have already significantly impacted Iran's ability to sell oil, as the USA has begun sanctioning a fleet of 'dark tankers' that formed a significant link in the Iranian supply chain. These vessels would engage in various illegitimate practices, including falsifying documents, changing their own identification beacons, and exchanging cargos on the high seas to conceal the Iranian origin of the oil.
Although Iran intends to purchase additional, unsanctioned tankers to attempt to circumvent these restrictions, there are additional logistical issues facing the millions of barrels of oil stored in Chinese ports. With limited time remaining before the new administration takes office, Iran is resorting to rented or hired foreign tankers, or vessels no longer strictly certified for the task, to try and release millions of barrels stored in China.
Another challenge Iran must contend with is excess supply - with the fall of the Assad regime and Chinese demand on the decline, Iran could be left with millions of barrels of unsold oil, which will do the IRGC regime little good if they cannot be used to fund its activities. Along with the crude oil is gas condensate fuel, which is even more worrisome due to the unfeasibility of stopping production. Even Russia, generally considered an ally to Iran, may not be willing or able to buy - Russia produces a significant amount of its own oil, and the economic burden of the ongoing Ukraine War has left it with a tighter hold on its finances than previously exercised.
President Masoud Pezeshkian’s government has set an ambitious target of exporting 1.85 million barrels of oil per day in next year’s budget bill, but the expected Trump sanctions may leave nowhere to send them.