Iran, September 2018 With Oil Production Calculation

Published 2018-10-07 22:35:03 UTC in Crude Oil Exports Report.

September 2018 was (and continues to be) an educational month, and we are kind of appreciative of the fact that Iranian tankers have begun to employ a range of interesting tactics and locations to cloak their exports ahead of the November 4th sanctions deadline. It gave us time to improve our ability to track vessels that entered or departed Iran without a clear trace; simply by switching off the AIS transponder.

We decided towards the end of September that we’d wait an extra week before wrapping up this report in case additional vessels start popping up. That turned out to be a wise decision as a few VLCC supertankers did in fact appear; and were part of September’s exports and not that of October. Though we have tracked and identified the tankers that transported 1,807,110 barrels per day during the month, the amount that was cloaked during transport by switching off AIS amounts to 720,367 barrels per day. That’s roughly 40% of the known vessels. Some were extremely easy to spot while others took days of imagery and AIS analysis as it involved STS (Ship-to-Ship) transfers in the UAE, for loading onto tankers bound for China. Did we mention that the smaller STS tankers were also partly cloaking the exports between Iran and the UAE? They thought of everything.

However, it doesn’t end there. We also have 3 VLCC (Very Large Crude Carrier) supertankers that remain unidentified and have departed at the end of September. If we assume 2 million barrels a piece, that’s 6 million barrels. Divide that by 30 days and we get 200,000 barrels per day. Adding that to the verified amount brings the total to 2,007,100 barrels per day. Let’s just call it a cool two million. This now means that nearly half of the total exports were cloaked.

In the satellite photo captured by Planet Labs on the morning of September 24th, 2018, we see three VLCC’s on the Azarpad berths to the left and a fourth on the eastern jetty. Only one of them has been identified after departure, the HUGE. She popped up two days later off the eastern coast of the UAE, bound for New Mangalore, India.

Most of Iran’s crude oil exports take place from the Kharg Island export terminal. One phenomenon that has surfaced during September is the number of fully (oil) laden tankers that are just floating around the island’s east anchorages. These tankers are considered to be “floating storages”, but some have shipped off to their destinations already. Our definition of floating storage is when a laden tanker is stationary in the general area for no less than 30 days. Anything less than that means that the vessel was only waiting for a destination to sail to.

The satellite photo below was captured on September 30th, the last day of the month. The red circles show 4 VLCC supertankers (2 million barrels each) while the yellow rings show 2 Suezmax (1 million barrels each), meaning 10 million barrels for this location. That’s oil that was removed from the Kharg Island’s storage tanks, which have a storage space capacity of close to 40 million barrels.

We then proceed to the offshore oilfield called Soroosh. Located halfway to Saudi Arabia, the FPSO (Floating Production, Storage & Offloading) vessel called KHALIJ E FARS (shown on the left in the photo below) has provided a VLCC called the HUMANITY (shown on the right) roughly 1.45 million barrels of crude oil. HUMANITY has been (and continues to be) in place nearly the entire month after completing the STS on September 3rd. This means she’s also a “FloSto” vessel, as we like to call them. That brings the FloSto constellation up to 11.45 million barrels for the month.

We also kept watch on the gas condensates at Asaluyeh, but very little activity until the end of the month, when a couple of tankers parked themselves there. We’ll probably have something to report about that during October.

Iran's September 2018 Crude Oil Exports in Barrels Per Day

Destination Barrels per Day Total Barrels Percentage by Destination
China 623,055 18,691,650 31.04%
India 499,097 14,972,910 24.87%
3 Unidentified VLCC's 200,000 6,000,000 9.96%
UAE 150,103 4,503,090 7.48%
Turkey 141,250 4,237,500 7.04%
Italy 137,214 4,116,420 6.84%
Spain 102,583 3,077,490 5.11%
Japan 46,194 1,385,820 2.30%
Greece 36,418 1,092,540 1.81%
Syria 36,061 1,081,830 1.80%
Croatia 35,134 1,054,020 1.75%
Total 2,007,109 60,213,270
Value ($82.72/barrel) $166,028,056 $4,980,841,694

As you can see, China and India came out fairly high, with India at around half a million barrels per day. The UAE (mostly importing gas condensates while also re-exporting crude oil) and Turkey followed thereafter. The European Union, represented here by Italy, Spain, Greece and Croatia amounted to 311,349 barrels per day, which is 15% of the total. Here is a map of all the vessels we tracked during the month.

As for Japan, we definitely saw a vessel called the YUFUSAN go on a regional shopping spree by first picking up gas condensates in Asaluyeh, then proceeding to Kharg Island for crude oil before continuing to Kuwait to pick up another grade of crude oil. After that, she set sail for Japan. This is a very, very common routine for Japanese tankers. However, if you read the article posted by Bloomberg, it actually says “India is joining other Asian buyers such as South Korea and Japan that have already halted imports from the Persian Gulf state before American restrictions take effect in early November.”.

Well, here’s a trace of the YUFUSAN which proves that claim to be false.

Oh, and here’s a satellite photo of her on September 9th, in Asaluyeh. In the photograph, there’s a hose connecting her to a floating buoy (SBM) which supplies the gas condensates via a submarine pipeline from shore.

And here she is two days later (September 11th), loading up crude oil at Kharg Island before continuing to Kuwait and finally the long sail to Japan. She’s the one on the left.

Moving on, we proceed to some of the Iranian tankers that have gone offline overseas.

We begin with the RISE GLORY, which departed for Syria on September 14th from Kharg Island with a million barrels. This photograph was taken on October 5th and the vessel went offline after its northbound exit out of the Suez Canal to the Mediterranean Sea.

And then we have the DIONA. She’s been offline since August 26th, 2018 in northeastern China, in a port called Changxingdao. While some trackers were wondering if she’s set sail back for Iran, we see that she’s at the dry dock “beauty salon”, where tankers usually get a nice belly scrub and maybe even a fresh coat of paint along with a refreshing Wunderbaum tree. This photo was captured today on October 7th, 2018. She’s been there for a while.

Finally, we move on to Iran’s crude oil production for the month of September. Our calculation factors in every data metric that should be used, including exports, storage change and refinery runs. When we look at Kharg Island storage, we must remember that it requires an adjustment on account of the fact that 10 million barrels are floating in anchorage. We naturally see a drop in inventory month-on-month, but not that much. If you look at the circles and focus on those that have a red edge along the southeast corner, those are the ones that show a draw/drop in storage over the month. It’s quite big, and corresponds with the floating storage. We estimate a draw of a million barrels, post-FloSto. When we punch that into our calculator, the number we get is 3,673,767 barrels per day, which means it’s up 7% since August, where we calculated 3,435,023 barrels per day; which was a massive 9.7% drop from July.

We also see a small draw in inventory in the top-right corner of the Bandar Abbas refinery, which has a 15 million barrel storage capacity. The oil arrives from Kharg Island.

Conclusion: We believe that Iran is benefiting from the news media narrative that exports are down. It helps drive the price of oil higher so they in turn make a lot more revenue. At the same time, they re-boosted production to facilitate exports and a buildup in floating storage.

All satellite images captured by Planet Labs.


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