Iran evaded US blockade to ship $6 billion worth of oil to China within a one-month window (Image source: ANI)
Iran is said to have taken advantage of a roughly one-month window when the United States lifted its blockade on Iranian oil to ship $5 billion to $6 billion worth of crude oil, according to estimates by United Against Nuclear Iran and oil analysts cited by The Wall Street Journal.Starting in late June, about 20 Iranian tankers began arriving in waters off the east coast of Malaysia after the United States lifted its blockade of Iranian ships following the interim agreement signed on June 17. Tehran was determined to get its pent-up oil supplies out of the country.The penultimate destination for oil was China. The first tanker to leave Tehran was Diona, followed by Hero 2, Sonya 1, and Stream.
Analysts say that the final destination of the oil is China.
How does Iran evade the blockade?
To evade US sanctions, Iran adhered to the rules of the game with which it had become familiar. They send their oil to an area known as the Eastern Outer Port Limit, outside Malaysia’s territorial waters, a rough midpoint between Iran and China.There, ships carrying Iranian oil use giant hoses to transfer it at sea to other oil tankers. Tankers receiving oil usually go to private refineries in China, known as independent refineries, which buy the oil at a discount.
This trick makes it difficult for the US authorities to crack down on Iranian oil sales.
Iran moved quickly to take advantage of the window
After the United States and Iran signed the interim agreement on June 17 that lifted the blockade, tankers loaded with oil at the port of Chabahar in eastern Iran quickly sailed toward Asia. In the second half of June, Iran exported about 50 million barrels of oil destined for eventual sale in China, roughly equivalent to Iran’s oil exports destined for China for a month before the war, according to United Against Nuclear Iran.Total estimates for the shipment between mid-June and mid-July, when the US blockade was lifted, are about 70 million barrels of oil, worth a total of $5 billion or $6 billion, according to reports.“The Iranian economy is at its worst since the revolution, so every dollar of revenue matters,” Jonathan Panikoff, a Middle East expert at the Atlantic Council, told the Wall Street Journal. “The regime is likely to prioritize revenues for its own strategic purposes – the most important of which is now fighting the United States.”Analysts say the recent rise in the number of Iranian ships arriving in Asian waters in July means Iran is likely to receive billions of dollars in oil revenue in the coming months.“If they had left the blockade, the crisis would probably have happened by now,” said Charlie Brown, a Singapore-based analyst at United Against Nuclear Iran. But once the blockade was lifted, “Iran quickly pumped more oil…so there was a large reserve again.”Since then, the United States has reimposed its blockade of the Strait of Hormuz, once again stifling Iranian exports.
