Bourse and Bazaar | Esfandyar Batmanghelidj: Iran is resorting to �Houdini tricks� to sustain oil exports as US sanctions loom. New data suggests the magic might be working. With new sleights of hand including disappearing oil tankers, the use floating storage, and ship-to-ship transfers, tracking Iranian exports is getting harder than ever, leading to divergent estimates from oil analysts.

While S&P Global Platts has reported Iran�s September exports at about 1.7 million bpd, marking an 11 percent decline from August, data from TankerTrackers.com, a service which reports shipments and storage of crude oil globally, puts the export volume at just over 2 million bpd. The divergence in the datasets represents not merely 300,000 bpd, but also the difference between two narratives about the state of Iran�s exports in the face of returning US sanctions.






As part of S&P Global Platts� announcement of the September figures, Paul Sheldon, chief geopolitical adviser at company, stated, "Iranian export losses have already accelerated faster than we expected.� On this basis, Platts is predicting Iran�s exports will fall to 1.1 million bpd by November, when U.S. sanctions on Iran�s oil industry are set to return. Similar analysis from Bloomberg and Reuters has contributed to the sense that Iran�s exports are dropping fast. But these assessments may be leaving a significant number of barrels uncounted by failing to properly capture tankers which have turned off their geolocation transponders.

Samir Madani, founder of TankerTrackers.com, emphasizes that such tactics are making life more difficult for those trying to measure Iran�s export volumes. "September was a very resource-demanding month from a vessel tracking perspective for not just us at TankerTrackers.com�but at some of the other trackers in the industry,� he said.

For Madani and his team, properly tracking tankers laden with Iranian oil requires extensive use of satellite imagery. �The reason is because roughly half of the exports were cloaked, meaning vessel crews switched off their AIS geolocation transponders before arriving into Iran to arrange the collection of crude oil,� Samir explained. �Their transponders were switched back on many days later, once they were already out of the immediate Gulf area.�

To overcome these cloaking tactics, Madani uses daily satellite imagery to �factor in vessels that were no longer broadcasting their positions.� This methods helps explain the significant discrepancy between his September estimate of Iran�s exports to China and that published by Platts. According to Madani, Iran�s state-owned National Iranian Tanker Company is particularly adept at cloaking exports in this manner, drawing on a playbook perfected in the previous sanctions period.

Any underlying resilience of Iranian exports is particularly important following reports that the United States is �actively considering waivers on Iran oil sanctions.� The exploration of waivers represents a break with the Trump administration�s previously communicated intention that �exports of Iranian oil and gas and condensates drops to zero.�

The level of imports covered by such �significant reduction exemptions� or SREs is typically determined by looking to historical import levels and the level of imports that can be reasonably restricted by sanctions. In this context, that Iran has been able possibly sustain over 2 million bpd in exports just one month before the reimposition of US sanctions bodes well for the extent of the waivers that may be offered. In likely anticipation of waivers from US authorities, India has already announced that it plans to import at least 9 million barrels of Iranian crude in November.

In an interview conducted during the United Nations General Assembly, President Hassan Rouhani told NBC�s Lester Holt that �The United States is not capable of bringing our oil exports to zero� and describe the Trump�s administration's threats as �empty of credibility.� Despite hopeful signs, Iran�s oil exports magic show is still in its first act. Whether Rouhani can outdo the great Houdini is yet to be seen.