New shipping data show that despite a surge in oil loadings from its Persian Gulf terminals over the past two months, Iran has faced difficulties in getting its crude to Chinese buyers, resulting in a large buildup of Iranian floating oil storage near Chinese waters.
Data from the commodity analytics firm Kpler indicate that over the past two months, Iran has delivered less than 1.2 million barrels per day of oil to China, on average, compared to 1.44 million barrels per day during the first eight months of this year.
However, Iran has significantly increased the volume of oil and condensate loaded from its Persian Gulf export terminals in the past two months, reaching 1.95 million barrels per day — the highest level since August 2018, when U.S. sanctions on the Islamic Republic’s oil sector began.
Between late August and early November, the volume of Iranian floating oil reserves more than doubled, surpassing 36 million barrels.
Recently, the Foundation for Defense of Democracies (FDD) published an article citing TankerTrackers data that highlighted Iran’s rising “oil exports.” However, FDD misinterpreted the data, confusing deliveries with oil loadings, not actual deliveries to China. Offloaded volumes at Chinese ports declined.
Kpler data show that between late August and early November, the volume of Iranian floating oil reserves more than doubled, surpassing 36 million barrels, clearly indicating a major gap between Iran’s loadings and the oil discharged at Chinese ports.
It is not clear why Iran has boosted loadings, or how long it will continue the practice, but during the previous round of United Nations sanctions (2012-2015)—before the signing of the Joint Comprehensive Plan of Action nuclear deal—Iran’s floating oil storage had surged above 100 million barrels.
The U.N. sanctions on Iran were reinstated in late September at the request of the three European Joint Comprehensive Plan of Action members because of Tehran’s failure to comply with nuclear commitments and its refusal to cooperate with the International Atomic Energy Agency. The sanctions do not directly target Iran’s oil exports; however, they affect shipping, fuel sales to Iranian vessels, authorization to inspect suspicious ships, cargo insurance, and banking vigilance over financial transfers—all of which pose additional challenges for Iran’s oil shipping operations.
Anticipating these difficulties, Iran is sending as much oil as possible to waters near China, its only crude buyer, to maintain a steady supply available for prompt delivery.
This strategy, however, raises the cost of circumventing sanctions. Chartering dozens of tankers to store oil offshore imposes a heavy financial burden. Under normal conditions, renting a large oil tanker costs about $100,000 per day, while vessels belonging to the so-called “shadow fleet”—which assume the risk of U.S. sanctions—charge several times more from Iran.
Iran has increased its oil discounts to Chinese buyers, now offering around $10 per barrel off a low market price.
Kpler reported last month that the United States has increased pressure on vessels that handle Iranian crude this year. Over 60 percent of the vessels that have loaded Iranian crude in the last twelve months are now sanctioned by the U.S. Department of the Treasury’s Office of Foreign Assets Control, up from 38 percent a year ago.
Meanwhile, analysts from Kpler and major media such as Reuters have reported that Iran has increased its oil discounts to Chinese buyers, now offering around $10 per barrel off a low market price. As a result, Iran is losing a significant portion of its oil revenue through the process of evading sanctions.
Recently, the Central Bank of Iran released a report on oil, petroleum product, and gas export revenues for spring 2025, showing that in the first quarter of the Iranian fiscal year (starting March 21), export revenues fell by $3 billion to $15 billion, which may also reflect lower market prices.
According to Kpler data, the volume of Iranian oil deliveries to China during this period did not change compared to the same time last year (1.5 million barrels per day); thus, the only real change appears to be greater loss of oil income due to sanctions-evasion costs and the drop in oil prices.
Iranian regime denial is like slapping a Band-Aid on a problem to cover up the injury. That may work when the injury is a scratch, but it will not when the patient is experiencing a sucking chest wound. So long as Iranian leaders refuse to recognize reality, they will not be able to compensate for the perfect storm now looming over their hydrocarbon economy.
