Iran is said to have taken advantage of a roughly one-month window when the US lifted its blockade on Iranian oil to ship out crude oil worth $5 billion to $6 billion, according to estimates by United Against Nuclear Iran and oil analysts cited by The Wall Street Journal.Starting late June, about 20 Iranian tankers began arriving in the waters off the east coast of Malaysia after the US lifted its blockade of Iranian ships following the temporary agreement signed on June 17. Tehran was determined to get its pent-up oil supplies out of the country.The penultimate destination of the oil was in China. The first tanker which left from Tehran was Diona, followed by Hero II, the Sonia I, and the Stream. The ultimate destination of the oil, analysts say, is China.
How Iran evades the blockade
To evade US sanctions Iran has stuck to the playbook it has become well-versed with. They send their oil to an area known as the Eastern Outer Port Limits, outside the territorial waters of Malaysia, a rough midpoint between Iran and China.There, the vessels carrying Iranian oil use giant hoses to transfer it at sea to other oil tankers. Typically the tankers receiving the oil will then head toward private refineries in China, known as teapot refineries, who buy the oil at a discount. The subterfuge makes it harder for US authorities to crack down on Iranian oil sales.
Iran moved fast to take advantage of the window
After the US and Iran signed the temporary agreement on June 17 that withdrew the blockade, tankers laden with oil in Iran’s eastern Chabahar port quickly sailed toward Asia. In the second half of June, Iran exported about 50 million barrels of oil bound for eventual sale in China, roughly equal to a month of China-bound exports of Iranian oil before the war, according to United Against Nuclear Iran.Total estimates of the shipment between mid-June and mid-July, when the US blockade was lifted, amounts to roughly 70 million barrels of oil, worth a total of $5 billion or $6 billion, according to reports.“Iran’s economy is in its worst shape since the revolution, so every dollar of revenue matters,” Jonathan Panikoff, Middle East expert at the Atlantic Council, told the WSJ. “The regime is likely to prioritise revenue for their own strategic purposes — chief among them right now is fighting the US.”Analysts say the recent surge in Iranian ships arriving in Asian waters in July means Iran will likely receive billions in oil revenue in the months to come.“If they had left the blockade on, the pinch would likely have hit about now,” said Charlie Brown, a Singapore-based analyst with United Against Nuclear Iran. But once the blockade lifted, Iran “quickly surged more oil…so there is a big buffer again.”The US has since reimposed its blockade of the Strait of Hormuz, choking Iranian exports once again.
