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Iran has secret oil store in Malaysia

Iran is trying evade sanctions by secretly storing oil bound for Asia at a little-known port in Malaysia.

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The night transfers near the port of Labuan reveal Tehran's desperation to protect its oil revenues after the imposition of an embargo by the European Union, which previously bought almost a quarter of the country's crude exports.

In the past month, two Iranian-owned tankers, the Lantana and Motion, have off-loaded three million barrels of oil near Labuan, an island port close to the coast of Borneo, according to Reuters Freight Fundamentals, which tracks global shipping. Another tanker was expected in Labuan this month, but is currently moored off the coast of south-west Malaysia.

These vessels are operated by the National Iranian Tanker Company (NITC), a state-owned enterprise blacklisted by Washington. The oil from the Lantana and Motion has been transferred to two storage vessels under cover of darkness without the knowledge of the Malaysian authorities, according to a Malaysian-based shipping source.

"That operation took place literally in the dark of night. They didn't even use a proper operator with experience to carry out the STS [ship-to-ship transfer]," said the source.

Both the storage vessels, are owned and leased by a complex network of companies based in the Far East. But one, the Titan Ruchira, is insured by the Newcastle-based North of England P & I Association.

Under EU sanctions, Western companies are barred from insuring ships carrying Iranian oil. The company was reportedly informed by the Government last month that the Titan Ruchira had received oil from an Iranian tanker.

"There is a risk a vessel providing storage services for Iranian oil would breach European sanctions laws," said Mike Salthouse, director of North Insurance Management, which acts as a manager for North of England P & I Association.

However, it is unclear whether EU sanctions apply to ships that store rather than transport Iranian oil. North of England P & I declined to comment, saying that it was investigating the situation.

While there is no clue to the oil's final destination, more than half of Iran's crude exports go to four Asian countries: China, India, Japan and South Korea. They import the oil in set amounts under exemptions from US sanctions.

Iran's economy is suffering as sanctions bite, with oil exports falling to one million barrels a day in July, according to the International Energy Agency, compared with twice that level last year.

The IEA cautioned that its data was incomplete and actual sales were almost certainly higher, although probably below 1.5?million barrels. The sanctions are now costing Iran $3.5 billion in lost revenue every month, according to the International Institute for Strategic Studies, steadily depleting the country's reserves, which are believed to range between $80?billion and $100 billion.

Oil-hungry China, which is the third-biggest importer of Iranian oil, has made no secret of its dissatisfaction with sanctions and Chinese companies have repeatedly been targeted by Washington for breaching them.

Last month, Beijing criticised America's blacklisting of a Chinese bank involved in the Iranian oil trade as a "violation of international rules that harms Chinese interests".

 

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