Iranian Oil Armada Heads to China ahead of US Sanctions

A source from the National Iranian Tanker Company said the company is shipping more than 20 million barrels of oil to Dalian.

“As our leaders have said it will be impossible to stop Iran from selling its oil. We have various ways of selling our oil and when the tankers reach Dalian, we will decide whether to sell it to other buyers or to China,” the source said, without elaborating further, Reuters reported.

So far, a total of 22 million barrels of Iranian crude oil loaded on supertankers owned by the National Iranian Tanker Co (NITC) are expected to arrive at Dalian in October and November, the data showed. Dalian typically receives between 1 million and 3 million barrels of Iranian oil each month, according to the data that dates back to January 2015.

The Islamic country previously stored oil at Dalian during the last round of sanctions in 2014 that was later sold to buyers in South Korea and India. Some of the biggest refineries and commercial oil storage facilities in China are located in Dalian.

One of 11 Very Large Crude Carriers (VLCCs) - Dune - discharged oil into a bonded storage tank at the Xingang section of the Dalian port on Oct. 8, Reuters reported last week, while a second VLCC Dino I switched off its transponder on Oct. 13 near the port.

Dino I reappeared earlier this week near Taiwan and has discharged its cargo onboard.

The Xingang area is home to several tank farms including commercial and strategic reserves. China National Petroleum Corp (CNPC) and Dalian Port PDA Co Ltd both operate commercial storage in the area, according to information on the companies’ websites.

CNPC is not expecting any Iranian oil to arrive at Dalian, a source familiar with the matter said, adding that buyers are unlikely to lift Iranian oil from bonded tanks in Dalian due to the US sanctions.

Three of the tankers, set to arrive in China in November, are heading to Changxing Island, the data showed.