“Iran is scrambling to find buyers, but other countries are also scrambling to diversify away from what they see as risky supply,” said Richard Meade, editor of Lloyd’s List.
In addition, the Angolan state-owned oil company Sonangol recently dropped out of an Iranian project to expand natural gas production in the South Pars field. Sonangol said that sanctions would make it difficult to finance its 20 percent stake in the $7.5 billion project.
For the moment, however, Iran is profiting from rising tensions, which have driven oil prices up. Moreover, it isn’t clear whether the volume of Iran’s oil exports has been reduced yet. Although exports through mid-February were lower than last year’s average, fluctuations aren’t unusual.
But traders and oil experts say that Iran will find it increasingly difficult to keep up its exports as the July 1 European Union oil embargo approaches and as the United States tightens restrictions on bank transactions with Iran. There are 13 international insurance groups — “protection and indemnity clubs” — that provide insurance for 90 percent of global shipping, and underwriters will be limited by sanctions.
With U.S. crude oil prices around $107 a barrel, Obama administration officials are watching closely, worried that oil-market pressures are racing ahead of sanctions plans. U.S. and European officials had been hoping to wean Tehran’s European customers off Iranian petroleum between now and the E.U. embargo date, offsetting the loss of Iranian crude supplies with increases in output by Saudi Arabia and other oil exporters. Instead, U.S. officials now fear that the prospect of a supply shortfall, tight oil markets and price increases in an election year.
“The sanctions [on the Central Bank of Iran] don’t kick in until June 28, but the insurers are already making their moves,” said a senior administration official, speaking on the condition of anonymity because he was not authorized to talk publicly about the events. “Already we’re seeing full tankers being parked because they can’t unload.”
PFC Energy, a Washington consulting firm, says that Iran has 35 million barrels in floating storage, about half its capacity. Oil traders at one European firm said four tankers are searching for a place to unload Iranian crude.
To make matters worse, the sidelining of Iranian oil is occurring when oil supplies are tight, the official said. Oil shipments from South Sudan, Yemen and Syria have all but stopped because of civil strife or sanctions; together they accounted for more than half a million barrels a day of oil exports, almost as much as Iran’s exports to Europe.