According to Saudi Energy Minister Khalid al-Falih, no one has any idea how much oil Iran will be able to export after new US sanctions against the Islamic Republic kick in on Nov. 4.
But more precisely, Iran’s shipment figures – crucial to oil markets – are already a mystery.
Iran’s oil exports are becoming harder to measure as ships switch off tracking systems, oil industry sources say, adding uncertainty over how far US sanctions are scaring off buyers. The prospect of more oil heading into storage could make number-crunching even tougher.
Amid pressure from US President Donald Trump to cool the price of oil, the lack of export clarity adds to the challenge for other OPEC members, chiefly top crude supplier Saudi Arabia, to make up for falling Iranian shipments.
Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries and estimates of its crude exports in October vary by more than 1 million barrels per day (bpd). That amount is enough to cover the oil demand of Turkey and move prices in the 100-million-bpd world market.
Before Trump’s May announcement of the sanctions, Iranian exports were above 2.5 million bpd.
Falih acknowledged the challenge in an interview with Russia’s TASS news agency published on Oct. 22. “Nobody has a clue what Iranian exports will be,” he said.
An Iranian oil official, asked how much crude Iran was exporting in October, declined to comment.
Oil prices have extended a rally on expectations the sanctions will test OPEC and other producers. Brent crude on Oct. 3 reached $86.74 a barrel, the highest since 2014, although it has since eased to $77.
While the Saudi minister may have been referring to what happens after sanctions kick in, the range of estimates of how much Iran is exporting now is already widening.
“A large set of numbers estimating Iranian October first-half exports have been thrown to the market these last few days, ranging for 1 million bpd to 2.2 million bpd, which is a massive spread,” Kpler, a data intelligence company, said.
According to Refinitiv Eikon data, Iran exported 1.55 million bpd in the first three weeks of October, higher than the 1.33 million bpd seen in the first two weeks of the month.
Kpler put Iranian exports at 1.85 million bpd in the first 24 days of October.
An industry source who also tracks the exports estimated a similar volume of 1.8 million bpd in the first half of October, including vessels not showing on satellite tracking. A second source initially agreed and later trimmed his figure to 1.65 million bpd through Oct. 22.
“It’s pretty high, I have to admit,” this source said of estimated exports in the first two weeks of the month. “It’s possible that there is a drop-off since.”
Signal switched off
At any time, adjustments to tanker schedules and week-by-week variation complicate the task. While easier than in the past due to satellite information, the tracking of tankers is still both art and science.
Another element may be making this harder, industry sources say.
Tankers loading Iranian crude sometimes switch off their AIS signal, an automatic tracking system used on ships, only to switch it back on at a later stage of their journey, according to oil industry sources.