Difficult Times for Iran's Sanctions-Evading Oil Brokers
With a naval blockade preventing Iranian tankers from leaving the Gulf, Iran has for the last 10 weeks been selling oil from floating stocks held primarily off Malaysia and China. Chinese purchasers, normally from the independent teapot refineries of Shandong, have colluded with Iranian brokers to disguise the origin of the oil and the transactions used to pay for it in exchange for a discount, but the sanctioned oil is drying up as stocks afloat are sold and run down. The trustees and middlemen involved face severe criticism within Iran and US Treasury action, including sanctions on the A7 network of financial sub-agents, most of which are registered in Hong Kong.
Why it matters: The squeeze on Iran's oil brokers matters for the sanctions theme because it shows how enforcement and the depletion of floating stocks can disrupt a sanctions-evasion network.