Tankers carrying Iranian crude to China are turning off their trackers, Kpler has reported, as cited by Bloomberg, as the threat of new U.S. sanctions looms large despite ongoing nuclear deal negotiations.
“Ship-to-ship transfers have been used to mask the origin of those cargoes,” a Kpler analyst told the publication. “Now they’re switching signals off for longer, so that it’s now even harder to trace those flows back to the source, which is Iran,” Muyu Xu also said.
The U.S. State Department earlier this month rolled out another round of sanctions targeting an Iranian oil smuggling network allegedly responsible for funneling billions in crude oil sales to China on behalf of Iran’s Armed Forces General Staff.
China is Iran’s biggest oil client, with the country’s private refiners buying most of Iran’s sanctioned crude. The two sides have established a trade relationship favorable for both. Iran gets to sell its crude that nearly everyone else shuns, while China’s independent refiners, the so-called teapots, get cheap oil.
The practice of going dark, or switching off devices that track a vessel’s location, is not new but according to the data, more tankers are now using it near the eastern coast of Malaysia, which is where a lot of Iranian tankers engage in ship-to-ship transfer before continuing to China.
The Trump administration has stepped up pressure on Iran’s government through sanctions ever since President Trump took office, seeking to use them as a means of forcing Tehran to give up plans for developing a nuclear weapon. Meanwhile, the two sides are negotiating a new deal regarding Iran’s nuclear program, and there are signs of progress, although a positive outcome remains far from certain.
Despite the additional sanctions from the U.S. government, Iran’s oil exports to China hit an all-time high of 1.8 million barrels daily in March.
By Irina Slav for Oilprice.com
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