Iran has been using oil terminals and storage facilities in China to ship its oil to its biggest buyer and keep sanctioned tankers operating despite the U.S. sanctions on Iranian oil exports, Iran International reported on Monday, citing top-level confidential correspondence of the former Iranian leaders.
Ali Shamkhani, who was a political adviser to the former supreme leader, Ali Khamenei, discussed in letters to Hamid Bovard, the former head of the National Iranian Oil Company and currently the acting oil minister as of early October, that Iranian authorities had instructed intermediaries to continue using shadow fleet vessels to keep trade with China alive, according to the confidential letters that Iran International has obtained.
Both Ali Khamenei and Ali Shamkhani were killed during the first U.S.-Israeli strikes on Iran in February.
Bovard, now acting oil minister, wrote in the correspondence that the Iranian Foreign Ministry had negotiated buying port facilities and oil terminals in China to establish a hub for sanctioned Iranian crude, per the documents obtained by Iran International.
Iran has also moved to secure long-term leases on large oil storage facilities in several Chinese locations.
The arrangement saw sanctioned vessels controlled by Ali Shamkhani’s son Hossein Shamkhani transport Iranian oil to terminals and storage facilities Iran controls in China.
Iran has bought control of port facilities at three locations in China, and stakes in docks in the Shandong province, the home to the independent Chinese refiners, sources at the Iranian Oil Ministry told Iran International.
Even before the start of the Iran war, China sought to distance itself from trade with Iranian oil by rejecting requests from Tehran to boost import quotas for Chinese refiners, demanding even deeper discounts, and boosting crude oil imports from Venezuela, according to Iran International’s sources.
Since the war began and the U.S. blockade in the Gulf of Oman choked off Iranian oil exports, Chinese independent refiners, the so-called teapots, have been looking for other cheap crude sources amid plunging Iranian volumes.
Publicly, Iran remains defiant and claims it will find ways to dodge the U.S. blockade.
But vessel-tracking services have estimated that Iran’s oil exports have plunged since August. Iranian oil in floating storage has also been drained amid the U.S. Navy blockade.
“There’s no more oil to discharge to China anymore,” Kpler’s head of crude oil analysis, Homayoun Falakshahi, said, as quoted by the Wall Street Journal last month.
By Charles Kennedy for Oilprice.com
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