Bandar Abbas, Iran/Houston: The hulking tanker Neptune was floating aimlessly this week in the warm waters of the Persian Gulf, a fresh coat of black paint barely concealing its true identity as an Iranian ship loaded with hundreds of thousands of barrels of oil that no one is willing to buy.
The ship’s real name was Iran Astaneh, and it was part of a fleet of about 65 Iranian tankers serving as floating storage facilities for Iranian oil, each one given a nautical makeover to conceal its origin and make a buyer easier to find. The Neptune had been floating there for a month, and local fishermen said there were two even larger tankers anchored nearby.
Iran, faced with increasingly stringent economic sanctions imposed by the international community to force it to abandon any ambitions to develop nuclear weapons, has been reluctant to reduce its oil production, fearing that doing so could damage its wells. But Iran has insufficient space to store the crude it cannot sell. So while it furiously works to build storage capacity on shore, it has turned to mothballing at sea.
Concealing identity: Oil tanker Iran Astaneh has been painted afresh and renamed Neptune at Bandar Abbas.
International oil experts say Iranian exports have already been cut by at least a quarter since the beginning of the year, costing Iran roughly $10 billion so far in forgone revenues. Many experts say the pain is only beginning, since oil prices have been falling and Iran’s sales should drop even more with the European embargo that went into effect Sunday.
“They are getting squeezed,” said Sadad Al Husseini, former executive vice-president for exploration and development of Saudi Aramco, the state oil company. “It’s too much trouble to buy Iranian oil. Why alienate the United States and Europe? And the rest of Opec is not very happy with Iran either.”
On Wednesday, a Kenyan oil official told Reuters that the country was cancelling an agreement to import up to 80,000 barrels of oil a day from Iran after Britain warned Kenya that it could run afoul of the sanctions. Meanwhile, South Korea said its imports of Iranian oil fell by nearly 50% in May, compared with April.
The drop in crude sales has hit Tehran with multiple challenges. Besides the financial impact, Iran has to figure out what to do with all the oil it continues to produce. Iran is pumping about 2.8 million barrels a day—already down about one million barrels daily since the start of the year. But it is exporting only an estimated 1.6-1.8 million barrels a day.
The unsold crude is being stored in what has been estimated to be two-thirds of the Iranian tanker fleet. Most of the ships are sailing in circles around the Persian Gulf as Iran tries to sell the mostly heavy crude at bargain-basement prices.
International oil experts estimate that Iran is now warehousing as much as 40 million barrels—roughly two weeks of production—on the tankers. An additional 10 million barrels are in storage on shore.
“We are now forced to sell our most valuable export product in secret,” said Nader Karimi Joni, an Iranian journalist specializing in oil. “Iran had a great reputation; now we have to falsify bills of lading, hide the oil’s origin and store oil on ships.”
The subterfuge operates on several levels, but here, on the waters off Bandar Abbas, it is all about the tanker, Neptune. Beneath the fresh black paint, the ship’s hulk bore the name in English and Farsi of the tanker company, NITC.
The ship, one of Iran’s smallest, was built in 2000 in South Korea.
To conceal their positions— and perhaps to hide just how many loaded ships are at sea— Iran’s oil tankers also frequently turn off their GPS tracking devices, according to IHS Fairplay, a London-based ship tracking data company. It mapped out the last-known destinations of all NITC tankers, including the Iran Astaneh, and concluded that 21 were last seen in the Persian Gulf.
“I hear there are a lot more up north close to the oil terminals,” said Rostam, the smuggler, as he pulled his small craft up alongside the tanker.
Smugglers regularly zip across the Strait of Hormuz in small speedboats to the northern tip of Oman, Rostam and others said, picking up boxes of all kinds of black-market goods.
Increasingly, Iran’s officials are warning its citizens to prepare for tough times ahead. On Monday, Ali Akbar Salehi, Iran’s foreign minister, made comparisons to the eight-year war between Iran and Iraq when he discussed with reporters the mounting pressures on Iran.
Iran’s vice-president, Mohammad-Reza Rahimi, speaking during a religious conference on Sunday, said his country would never be stopped, and he asked for people’s support, state television reported.
Aboard the Neptune, the crew knew what that meant: killing more time baby-sitting crude at sea.
©2012/ THE NEW YORK TIMES
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