September 14, 2018 / 3:25 AM / 6 months ago

RPT-Iran floats surplus oil as demand falls ahead of U.S. sanctions

 (Repeats earlier story to restore to screens.)
    * Two tankers carrying Iranian oil floats off UAE for a
    * Ships carry about 2.4 mln bbls condensate in total
    * South Korea halts Iran oil imports since Aug on U.S.
    * China's demand for Iran condensate drops in summer

    By Florence Tan
    SINGAPORE, Sept 13 (Reuters) - Two tankers carrying Iranian
condensate, a type of ultra-light oil, have been floating off
the United Arab Emirates for about a month as demand for the oil
fell ahead of U.S. sanctions.
    The tankers, carrying about 2.4 million barrels of South
Pars condensate combined, have been floating off the UAE since
August after South Korea halted imports from Iran while China's
demand dropped during summer, according to several industry
sources and shipping data. 
    The build-up in Iranian oil supplies underscores the
pressure that Iran is facing as Washington aims to bring Iranian
oil exports down to zero to force Tehran to re-negotiate a
nuclear deal.    
    The Very Large Crude Carrier (VLCC) Felicity loaded
condensate at Iran's Assaluyeh port in early August and then set
sail for Jebel Ali in the UAE, shipping and trade flows data on
Thomson Reuters Eikon showed. It arrived at the ship-to-ship
transfer area off Dubai on Aug. 7 and has been anchored there
    Similarly, the Suezmax tanker Salina also loaded oil at
Assaluyeh and has been circling in the same area off Dubai since
Aug. 17, according to the data. 
    Oil processors in South Korea, Iran's top customer for South
Pars condensate, halted Iranian oil liftings in July as banks,
insurance and shipping companies wound down business related to
Iran before U.S. sanctions the country's petroleum sector kick
in on Nov. 4.
    China typically cuts South Pars condensate imports sharply
during the summer months between the second and third quarter
because of its foul smell, the sources said. The condensate
contains high levels of a sulphurous compound known as
mercaptans that require additional processing by refiners to
    "Taking a cargo to China now when China may not want its
arrival dates means it may lose a cargo to India," a U.S.-based
trader said. "So the cargoes will stay in place until they need
to leave on agreed delivery period." 
    Emirates National Oil Company (ENOC), another buyer of
Iranian condensate, has been asked by the UAE government replace
Iranian supply with imports from other countries, one of the
sources said.     
    The UAE authorities are cracking down on oil and financial
activities linked to Iran before the sanctions take effect.
    The National Iranian Oil Co and ENOC did not respond to
requests for comment.
    The number of ships loaded with Iranian oil and anchored off
the loading port of Kharg Island and the Souroush oil field has
also risen as Iran's pool of buyers shrank, the data showed.
Three supertankers capable of carrying 2 million barrels, the
Happiness I, MT Hedy and Humanity, have floated for 10 days or
more while another four have been there for less than a week.
    Iran's August crude and condensate exports fell to 67.7
million barrels, the lowest since April 2017, according to data
from Thomson Reuters Oil Research and Forecast.    
 Ship name    Type       Location    No. days
                                     floating (as
                                     of Sept. 13)
 Felicity     VLCC       Jebel Ali               36
 Salina       Suezmax    Jebel Ali               27
 Happiness I  VLCC       Kharg                   12
 MT Hedy      VLCC       Kharg                   10
 Humanity     VLCC       Soroosh                 10
 Halti        VLCC       Kharg                    7
 Navarz       VLCC       Kharg                    6
 Destiny      VLCC       Kharg                    4
 Sea Cliff    VLCC       Kharg                    2
 Source: Thomson Reuters Eikon

 (Reporting by Florence Tan in SINGAPORE, Rania El-Gamal in
DUBAI, Colin Eaton in HOUSTON, Jonathan Saul and Amanda Cooper
in LONDON; Editing by Christian Schmollinger)
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