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Iran storing under 10 million barrels at sea

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Oil supertanker Iran Hengam is sailing in international waters in this file photo.

Iran’s crude oil in offshore floating storage is less than 10 million barrels, a senior energy official says, dismissing foreign media estimates of higher volumes as “psychological warfare”. 

“Iran’s crude oil stored at sea is less than 10 million barrels and is not a big figure,” Managing Director of the National Iranian Oil Company (NIOC) Rokneddin Javadi told reporters on Friday.

Other Iranian officials have said much of the oil stored on supertankers at sea is condensate which has been building up for a variety of reasons, including a fire at the biggest buyer of the product in China.

“What is said about our floating storage has origins in psychological warfare to some extent. However, the stored gas condensate at sea is another story,” Javadi said.  

“Producers begin to store crude oil in order to have an operational power when demand in the market declines. Accordingly, we have no unconventional crude oil storage,” he added.

Oil consumers have been speculating that Iran might be storing up to 40 million barrels of oil in VLCC supertankers as part of a sales drive when sanctions are lifted on the country.    

Iran has no problems for sales of its crude even under sanctions which have to be lifted under a nuclear agreement reached in July, another energy official said.

“For every barrel which we produce, there is a customer,” Managing Director of the Iranian Offshore Oil Company (IOOC) Saeed Hafezi said.

Javadi said negotiations have been held with a number of countries for raising oil sales which will be made public when agreements are signed.

“Our assessment is that our crude sales will rise by 500,000 barrels (per day) immediately and in less than a month after the removal of sanctions,” he said.

NIOC Managing Director Rokneddin Javadi says Iran will unveil its new oil contracts at a Tehran conference in November.

Javadi said he believed crude oil prices will not fall beneath $40 or $45 in the upcoming months, adding Iran’s oil was also selling in this range in the international market.

NIOC will also unveil its new oil contracts first at a Tehran conference most probably in early November, he said. “The supplementary conference will be held one or two months later most probably in London,” he added.  

Officials have been touting the new energy contract model, hoping to attract foreign investment to the country’s vast oil and gas sector after the removal of sanctions.

The new contracts called the Iran Petroleum Contract (IPC) will be unveiled for a combination of brown and green fields as well as exploration blocks up for development in a series of projects worth $185 billion.  

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