An Iranian oil tanker reappeared in early June, transmitting its position for the first time in nearly a year, and taking an unusual path to transport 2 million barrels of heavy sour crude, currently in short supply in the oil market, according to a report by TankerTrackers.com.
When Hasna, a very large crude carrier (VLCC) owned by the National Iranian Tanker Company (NITC), came back online on June 7, it was curiously off the Indonesian Archipelago, heading east instead of sailing the Malacca Strait. For observers tracking the movement of Iranian tankers since Washington reinstated its sanctions on Iran in 2018, the unusual navigational behavior of Hasna would have signaled that the tanker was on a tactical course.
According to TankerTrackers.com, the VLCC kept moving with its automatic identification system (AIS) on and took a winding course: it sailed through the Bali Sea, then the Makassar Strait, before reaching a location slightly to the north of Singapore. “This is a highly unusual route,” the report says, pointing out that the path Hasna followed had to be linked to the type of crude oil it sought to transport.
Hasna loaded heavy sour crude in late March at Iran’s Soroosh offshore oilfield, according to TankerTrackers.com data that relied on satellite imagery from Planet Labs (see image below). The availability of heavy sour crude in the market has dropped, with Venezuelan exports slumping as a result of US sanctions. When heavy crude oil is refined, it yields bitumen and heavy fuels among other products. A Bloomberg report published this month noted that as China’s economy reopens and infrastructural spending resumes “domestic demand for fuels as well as bitumen are set to get a lift.”
A tanker and an FPSO in the water. The tanker is loading crude oil.
Location where VLCC Hasna picked up 2 million barrels of Soroosh heavy crude oil in Iran. Planet Labs
Samir Madani, co-founder of TankerTrackers.com, pointed out in a private conversation that given the shortage of heavy sour crude oil, Soroosh crude shipments from Iran will likely “be treated as very important parcels” to address demand as Venezuela’s exports dwindle.
“We believe that Iran wanted to show that they were completely avoiding risky waters for this particular parcel,” TankerTrackers.com said in its report, in reference to the presence of the US Navy in the Singapore Strait. Last year, authorities in Gibraltar seized Iranian VLCC Adrian Darya 1 (previously known as Grace 1) on suspicion of transferring oil at that time to Syria in violation of western sanctions.
“Maximum Pressure” Yields Maximum Obfuscation
Ever since the US reinstated sanctions, Iranian maritime tactics have become more sophisticated to evade those restrictions, with vessel activities being increasingly obscure in the Persian Gulf, the Mediterranean, and Asia. In addition to switching off AIS transponders, tankers have also been spoofing AIS data, signaling for fake destinations to conceal their routes, engaging in clandestine ship-to-ship oil transfers to mask the origin of cargoes, changing names, and disappearing for long duration before re-emerging on the high seas with missing AIS data.
The US “maximum pressure” campaign has affected Iran’s crude oil and condensate exports to several clients and weakened its role as a supplier in key markets, especially India and China. However, while the volume of exports has dropped significantly since 2018, Washington has not been able to stop Iran from moving its oil outside the Persian Gulf, or “bring Iran’s oil exports to zero.” Looking at April for instance, data from TankerTrackers.com shows that Iran exported 905,000 barrels per day (bpd) of crude and condensate compared to 2.7 million bpd the same month in 2018.
Lower oil sales under US sanctions have further underlined the importance of focusing on non-oil exports, and efforts are already aimed at that goal as Esfandyar Batmanghelidj, founder and publisher of Bourse & Bazaar, highlights in an article published this month, focusing on the rise of manufactured goods exported from Iran.
However, Iran will continue to export oil at reduced volumes, so long as unilateral US sanctions are in place. Further US attempts to squeeze those exports will increase the tricks to obfuscate the movements of Iranian oil tankers, and the navigational behavior of Hasna is one of many examples.
Oil Transferred Clandestinely
When Hasna reached the waters off the Malaysian coast earlier this month, it was a matter of time before it switched off its AIS signal. The area is known for ship-to-ship oil transfers, including Iranian oil bound for China.
On June 16, Hasna went dark. However, using various tools including synthetic aperture radar (SAR) data, TankerTrackers.com concluded that Hasna transferred its cargo to another tanker which was also off the radar, and whose identity remains unknown so far. On June 20, the Iranian VLCC came back online, and it later sailed through the Singapore Strait out of the area. As of June 23, it was signaling for the port of Khark in the Persian Gulf, with a draft showing the vessel is empty, according to data from MarineTraffic.
Some China-linked tankers have skirted US sanctions and employed tactics to pick up Iranian oil including from vessels off the coast of Malaysia, leading Washington to sanction last year a number of Chinese companies. However, Beijing has continued to pull in Iranian oil, albeit at lower levels compared to the volume before Washington reimposed sanctions on Iran.
Although there is no concrete evidence so far that VLCC Hasna transferred its heavy sour crude oil to a China-bound vessel, “all past evidence shows China”, as TankerTrackers.com says in its report.