Market Dynamics Shift as Iranian Crude Stockpiles Build Offshore
Spot freight rates for Iranian crude held in floating storage have surged in recent weeks, reflecting a sharp increase in offshore inventories following Tehran’s decision to escalate export volumes under the temporary diplomatic accord with Washington.
Despite the uptick in available cargoes, demand from China’s independent refiners has remained subdued. Industry sources report that these buyers continue to prioritise lower-cost alternatives from Iraq, the UAE and Qatar, leaving a growing volume of Iranian crude anchored in regional waters.
Reinstatement of U.S. Sanctions Adds Downward Pressure
The partial reimposition of U.S. sanctions has further complicated the sales landscape. While the interim agreement provided a brief window for elevated shipments, the return of restrictive measures has constrained traditional buyers, forcing Iranian exporters to rely on a narrower pool of counterparties.
Analysts note that the resulting oversupply has pushed floating-storage rates higher, as traders seek to cover the cost of extended laytime. Vessels carrying Iranian grades are now commanding premiums of up to 20 % above regional benchmarks, according to recent fixture data.
Outlook: Persistent Volatility Expected
Market participants anticipate continued volatility in the near term. With sanctions enforcement likely to tighten and Chinese refiners maintaining their preference for discounted Middle Eastern grades, the current imbalance between supply and demand is expected to persist. Owners of tonnage tied to Iranian cargoes may face prolonged waiting periods, further inflating demurrage costs.
Seafarers operating in the Persian Gulf and Gulf of Oman are advised to monitor port congestion advisories and maintain close coordination with charterers to mitigate delays.