Iran has opened its first oil terminal in the Gulf of Oman, President Hassan Rouhani said on Thursday, to allow Iranian tankers to avoid using the strategically vulnerable Strait of Hormuz, which has been a focus of regional tension for decades.
"This is a strategic move and an important step for Iran. It will secure the continuation of our oil exports," Rouhani said in a televised speech. "This new crude export terminal shows the failure of Washington's sanctions on Iran."
Rouhani said Iran aimed to export 1 million barrels per day (bpd) of oil from Bandar-e Jask, a port on Iran’s Gulf of Oman coast, just south of the Strait of Hormuz.
Iran has often threatened to block the Strait if its crude exports were shutdown by U.S. sanctions, reimposed by Washington three years ago when then president Donald Trump abandoned Tehran's nuclear deal with six major powers.
Tehran and U.S. President Joe Biden's administration have been in indirect talks in Vienna since early April to revive the deal, under which Iran agreed to curb its nuclear programme in return for the lifting of most international sanctions.
"The implementation of the Goreh-Jask port crude oil transfer project took place with about $2 billion investment," Iran's Oil Minister Bijan Zanganeh said, according to the ministry's SHANA website.
The Strait is a narrow channel at the mouth of the Gulf through which about a fifth of the world’s oil passes from Middle East producers to markets in Asia, Europe, North America and beyond.
There have been periodic confrontations between Iran’s elite Revolutionary Guards and the U.S. military in the area.
In related developments a Chinese logistics firm has emerged as a central player in the supply of sanctioned oil from Iran and Venezuela, even after it was blacklisted by Washington two years ago for handling Iranian crude, seven sources with knowledge of the deals told Reuters.
The more prominent role of China Concord Petroleum Co, also known as CCPC, and its expansion into trading with Venezuela, have not previously been reported and highlight the limitations of Washington's system of restrictions, analysts say.
The details of the deals were described to Reuters by a range of individuals including one China-based source familiar with CCPC's operations, Iranian officials and a source at Venezuela's state-owned oil company PDVSA.
Many refineries worldwide, including state-run players in China, stopped buying crude from Iran and Venezuela after the U.S. imposed sanctions, cutting millions of barrels per day from exports and billions of dollars from their income.
Dependent on oil revenues to run their countries, Tehran and Caracas have since engaged in an elaborate game of cat-and-mouse with Washington to keep exporting crude, employing numerous techniques to avoid detection, including ship-to-ship transfers, shell companies and middlemen who operate outside the U.S. financial sphere.
In the past year, CCPC has acquired at least 14 tankers to transport oil from Iran or Venezuela to China, two of the sources said.
Iran's oil ministry has declined to comment.
"China maintains normal, legitimate trades with Iran and Venezuela under the framework of international law that shall deserve respect and protection," a spokesman for China's foreign ministry said in response to questions about the role of Chinese companies in the trading of sanctioned oil.
"China strongly opposes unilateral sanctions and urges the United States to remove the 'long-arm jurisdiction' on companies and individuals."
Iranian officials familiar with the matter confirmed that CCPC was a central player in Tehran's oil trade with China.
China received a daily average of 557,000 barrels of Iranian crude between November and March, or roughly 5% of total imports by the world's biggest importer, according to Refinitiv Oil Research, returning to levels last seen before former U.S. President Donald Trump re-imposed sanctions on Iran in 2018.
The US Treasury declined to comment when asked about CCPC’s critical role in facilitating oil trade from Iran and Venezuela, but said that the agency pursues actions on an ongoing basis.
The 14 tankers acquired by CCPC have a capacity of around 28 million barrels of oil. At least one other tanker is also linked to CCPC, boosting their capacity to some 30 million barrels, the two sources said.
Iran exported more than 600,000 bpd of crude in June, a Reuters survey showed. That compares with a high of 2.8 million bpd in 2018, before sanctions were imposed, but up from 300,000 bpd in 2020, according to assessments based on tanker tracking data.
Sources: Nasdaq, Iran International