Vessel's Odyssey Reflects Iran's Oil Sale Woes

Industry sources believe a vessel that left the Omani port of Sohar last November may be carrying Iranian crude that it was unable to sell, reflecting Iran's continuing struggle to find buyers for its oil because of US sanctions.

The Panama-flagged Arina was carrying 733,876 barrels of "light crude," according to a bill of lading, dated Nov. 14, 2020, that was seen by Energy Intelligence.

The authenticity of the bill of lading could not be verified.

The document names the Black Sea port of Batumi in Georgia as the discharge destination, and an Oman-based company is listed as the seller of the crude.

However, the owner of the company denied any involvement with the vessel or its cargo when contacted by Energy Intelligence.

Traders say it is not uncommon for shipping documents to be forged in order to conceal the origin of a cargo.

Industry experts also note that the bill of lading in this case raises several red flags.

Firstly, the port of Sohar is not used to export Omani crude. And secondly, the generic description of the cargo as "light crude" often points to Iranian oil that is being shipped under the radar.

Unconventional Proposal

It appears that the Arina has been unable to unload its cargo in any port since early November when it participated in a ship-to-ship transfer from a National Iranian Tanker Co. vessel, according to tanker-tracking data.

Traders told Energy Intelligence that this might have been because of insufficient documentation, which led to the vessel being rejected by several European ports and in Turkey.

One source told Energy Intelligence, there had been an attempt in May to sell the cargo to a European refiner in an "unconventional" way that also led to rejection.

Since the Trump administration pulled the US out of the Iran nuclear deal in May 2018 and subsequently slapped harsh sanctions on Iran, its ability to export crude has been severely diminished.

Crude shipments have fallen well below 1 million barrels per day from 2.5 million b/d prior to US sanctions, with some estimates putting last month's shipments as low as 300,000 b/d, according to data intelligence firm Kpler.

China has been the sole buyer of larger Iranian crude volumes, but after a surge earlier this year Iran's exports have declined.

Although Tehran has become increasingly creative in concealing its oil exports in recent years, the odyssey of the Arina could show the difficulties Iran still faces in selling its crude as customers remain worried about running foul of US sanctions.

According to tanker-tracking data, the Arina was located off the coast of Georgia for the first 10 days of February and later off Romania from Feb. 14 to May 26.

In August, the vessel underwent another ship-to-ship transfer, offloading just over 200,000 barrels of its cargo, according to tanker-tracking data.

No one from Saint James Shipping, which operates the Arina was available to comment.

Fuel for Lebanon

The vessel roamed for some time offshore Lebanon, which led traders to speculate that there might be an attempt to deliver the remaining cargo to Syria, which has experienced fuel shortages because of tough US sanctions.

The Arina remained in the East Mediterranean as of Oct. 8, with tanker-tracking data showing the Pakistani port of Karachi as its next destination and a scheduled arrival date of Sep. 9.

Over the past month, three vessels have each discharged an estimated 250,000 bbl of emergency Iranian fuel supplies at the Syrian port of Banias. The oil was then carried by trucks to Lebanon to avoid exposing Beirut to US sanctions.

Lebanon's financial crisis and its severe shortages of electricity and fuel prompted Hezbollah, the country's powerful Shiite militant group, to turn to its ally Iran for help. It announced an emergency plan to import Iranian oil in August.

Foreign Minister Hossein Amir-Abdollahian said Iran would continue its "support for Lebanese independence, security and sovereignty," during a visit to Beirut on Thursday, according to Iranian state media.