Iran ships 20 million barrels of oil as US blockade lifts

Iran Oil Exports Surge as Supertankers Depart Following End of US Naval Blockade

Iranian crude oil shipments have surged this week after the United States lifted its naval blockade of Iranian ports, with Bloomberg reporting that 11 tankers carrying a total of 20 million barrels departed Iran’s coast in the days since a preliminary peace deal took effect. The flood of oil onto global markets has sent Brent crude below $78 a barrel, a drop of roughly 38% from the four-year high of $126 reached in late April.youtube

A Blockade Lifted, a Flood Unleashed

U.S. Central Command announced Thursday that American forces had ended their blockade on vessels navigating to and from Iranian ports, part of a ceasefire arrangement as both nations enter 60 days of negotiations over Iran’s nuclear program. The blockade, which began on April 13 and involved more than 10,000 U.S. personnel and over a dozen warships, had reduced Iran’s crude exports to zero in May.reuters

The first tankers crossed the blockade line on June 16, when two Very Large Crude Carriers — the Diona and Hero II — along with the Suezmax tanker Sonia I departed carrying approximately 5 million barrels combined. By Wednesday, TankerTrackers.com confirmed these were Iran’s “first crude oil exports in two months”. The pace has accelerated sharply since, with multiple additional supertankers departing from Iranian ports along the Gulf of Oman.aljazeera

Oil Markets React

The resumption of Iranian exports, combined with the reopening of the Strait of Hormuz to toll-free commercial shipping, has rattled oil markets. CNBC reported that Brent crude futures fell 5% on Tuesday alone to close at $78.96 per barrel, the first time the international benchmark dipped below $80 since March. New York crude dropped below $75 a barrel by Thursday.cnbc

Before the war began on February 28, Brent crude was trading around $70 per barrel. Prices surged as high as $126.41 in late April amid fears of prolonged supply disruption, before retreating as ceasefire talks gained momentum.abc7news

The Deal’s Terms

Under the memorandum of understanding signed Wednesday in Geneva, the U.S. Treasury will grant waivers for Iranian crude exports along with related banking, insurance, and transportation services. Iran has pledged to ensure safe passage through the Strait of Hormuz and to refrain from developing nuclear weapons. The two sides have 60 days to negotiate a final agreement covering sanctions relief and Iran’s enriched uranium stockpile.nytimes

U.S. gasoline prices have already fallen below four dollars a gallon for the first time since March, according to Bloomberg Television, providing relief to consumers heading into the summer driving season.youtube