Iran has 69 million barrels of oil ready for when US sanctions end

Iran may have some 69 million barrels of oil in floating storage waiting on tankers to travel to buyers when US sanctions on its crude oil exports are removed, estimates from E.A. Gibson Shipbrokers cited by Bloomberg show.

Citigroup also has a similar estimate on Iran’s floating storage. In a note on Monday, the bank said Iran could have around 65 million barrels of oil stored at sea, plus another 54 million barrels in storage onshore.  

The United States and Iran have been holding indirect talks in Vienna since last month on possible ways for both countries to return to the so-called Iran nuclear deal. US President Joe Biden has signaled a willingness to return to the nuclear deal, but only if Iran returns to full compliance in its nuclear activities. Iran, for its part, has said it would start complying with the nuclear deal only after the US lifts the sanctions on Tehran.

The official meeting of the Joint Commission of the Joint Comprehensive Plan of Action (JCPOA), marking the beginning of the fifth round of the Vienna talks, is starting on Tuesday, May 25, Mikhail Ulyanov, who leads the Russian delegation at the talks, tweeted early on Tuesday, adding in a reply to a question that this could be the final round of talks.

In case an agreement is reached, and after the US sanctions are lifted, Iran could deliver oil “to major export markets, including India and China, within 10-20 days,” Citigroup said in its Monday note, as carried by Bloomberg.

Yet, Iran’s floating crude will not be cleared overnight after a lifting of the US sanctions, Gibson Shipbrokers’ head of research Richard Matthews told Bloomberg. The payment channels must also be cleared, as well as all other formalities before buyers regain confidence that they would be buying Iranian oil legitimately. Therefore, the clearing of Iran’s crude oil stash will likely take months with a gradual ramp-up of activity, Matthews told Bloomberg.

This article was originally published on Oilprice.com