Iran Stores Oil Surplus on Idle Ships

Sanctions preventing the sale of Iranian oil have the country stock piling the backup onboard ships

With stringent economic sanction in place Iran is unable to sell its oil, forcing the country to stock the excess oil onboard idle ships off its coast. Several Iranian tankers have been painted and renamed to conceal their identity to make finding a buyer more likely. The Neptune, who name was changed from Iran Astaneh on June 1st, has been anchored in the Persian Gulf for a month.

Two other tankers had been anchored nearby, but they are now gone. Iran has refused to reduce its oil production, continuing to pump 2.8 million barrels a day, out of fear of damaging its oil wells. The high production and lack of sales is leaving the country with millions of barrels to store.

Iran’s exports have been cut by more than a quarter in 2012, costing the country more than $10 billion. The impact is expected to grow with the European Embargo that went into effect on Sunday and falling oil prices.

Shipping agencies and trackers say the tankers are turning off their GPS capability to conceal their locations and oil companies are forging bills of lading to conceal the oil onboard and its origin.

The U.S. Navy has ships in the Strait of Hormuz monitoring activity and keeping the waterway open for trade.