The decline may stem from a halt by tanker owners to carrying crude from Iran before sanctions that ban insurance coverage for any ships calling at the Persian Gulf country begin July 1, according to Gibson. That’s the date a European Union embargo on the country’s oil takes effect.
“This may have left a void which has necessitated the use of Iranian-controlled very large crude carriers to move more cargoes, which could account for their increase in activity,” Gibson said. “It may also be a decision by Tehran to offload as much crude as possible ahead of the impending sanctions.”
Floating Storage
NITC, an Iranian owner of at least 26 VLCCs, has used as many as 25 of the vessels at any one time to store crude over the past two years, according to Gibson. About 12 were used on average over 2011 for floating storage, the broker estimated, citing vessel-tracking data.
Most of the crude shipped to India in January was carried on NITC tankers, according to Gibson. India was the largest buyer of the oil that month, analysis from Lloyd’s List Intelligence, a unit of London-based Informa Plc, showed. Some NITC vessels are going to China, Taiwan and Singapore, while the destinations of others recently loaded with crude for export were unknown, said Gibson.
NITC’s ability to continue transporting crude on its vessels after July can’t be determined, and some of the fleet may have to be idled, particularly if China cuts imports, the shipbroker said. The nation is the world’s second-biggest consumer of crude after the U.S.
China imported 2 million metric tons of oil in December, the latest month for which figures are available, compared to an average of 2.3 million tons in 2011, data show.