Seized Iranian crude in floating storage near Texas

A cargo of up to 2mn bl of confiscated Iranian crude has been sitting idle off the Texas coast near near Houston since 14 February, awaiting its disposition before a federal judge.

Earlier this month the US Department of Justice asked a US court to authorize forfeiture of the Iranian oil cargo aboard the Liberia-flagged Achilleas, a very large crude carrier (VLCC). It was the first such action under President Joe Biden's administration.

The cargo aboard the Achilleas was transferred from ship to ship three times since being loaded into the Iran-flagged Sarak and Sonia I at the Sirri Island oil terminal in Iran in May 2020, according to US court documents.

Washington claims jurisdiction over the cargo by stating that the ultimate beneficiary of all Iranian oil exports is Iran's Islamic Revolutionary Guard Corps (IRGC) that the US labels a "terrorist organization."

A 2mn bl shipment of Iranian Light crude would be worth an estimated $126.7mn based on its current price at a $2.67/bl discount to North Sea Dated, or $62.39/bl on an outright basis. That level would amount to an estimated $63.17/bl after transportation costs to the US Gulf coast, or 26¢/bl higher than the level at which competing US light sweet West Texas Intermediate (WTI) was priced in the regional waterborne market yesterday.

The transfer of the cargo to the US for sale is the second example of the US successfully seizing an Iranian cargo.

Last year, the Justice Department sold 1.16mn bl of Iranian-sourced fuel confiscated in August 2020 aboard four tankers that were allegedly being delivered to Venezuela.

About 250,000 bl of that cargo ended up discharging in October 2020 in New Jersey.

By Liz Ramanand