Iran begins retrieving 25 million barrels of stranded oil in China - WSJ

A month after Iran International's exclusive report on Tehran's efforts, with IRGC assistance, to withdraw 25 million barrels of blocked oil reserves in China, The Wall Street Journal reports that these shipments are now being allowed to load onto outbound tankers.

The 25 million barrels of oil were gradually shipped to China prior to May 2019 as a precaution when President Donald Trump imposed sanctions on Iran’s oil exports but granted China temporary waivers. However, in May 2019, when the Trump administration revoked these waivers, the oil was left unsold and stranded in leased storage tanks at the ports of Dalian and Zhoushan.

On December 23, Iran International first reported on the IRGC’s mission to remove these oil reserves from Chinese Dalian port. In a subsequent report, Iran International cited a source as saying that Iran was trying to withdraw other oil reserves from Zhoushan Port, China.

Following these reports, Reuters sources on January 8 confirmed the existence of such a large volume of blocked Iranian oil reserves in China, adding that Iran must pay $450 million in storage fees to Chinese oil storage facilities to release it.

The Wall Street Journal latest report on January 11 has shed new light on Iran’s efforts to retrieve its stored oil from China, warning that the IRGC has taken charge of unloading and claiming this oil. There are concerns that the proceeds from its sale may be transferred to the Islamic Republic's regional proxy forces.

The report adds that two tankers, the Madestar and CH Billion, were recently dispatched to Dalian port to load part of the Iranian oil.
The Madestar, left Dalian earlier this month carrying 2 million barrels of oil, while the other, the CH Billion, is reportedly still docked in Dalian with a cargo of 700,000 barrels.

To circumvent sanctions and sell its oil, Iran has relied on intricate shipping networks. For a Chinese buyer to purchase the stored Iranian oil, the shipment would first need to leave China and re-enter, with its documentation altered to disguise it as non-Iranian oil.

According to The Wall Street Journal, the current value of Iran’s stranded oil in China exceeds $2 billion. However, Tehran owes approximately $1 billion in fees for the leased storage tanks at the two Chinese ports, twice as much as reported earlier by Reuters.

The newspaper, citing informed sources, wrote that concerns have grown over the withdrawal of the oil from Chinese ports and Tehran’s efforts to sell them under the IRGC's direction.
According to the report, Iran has allocated the revenue from this operation to the IRGC, which funds and arms affiliated groups across the Middle East.

In this context, the Associated Press reported on Sunday, January 12, that Hezbollah has started paying compensation to war-affected residents of southern Lebanon. In the past Iran has financed reconstruction costs and assistance to the Shiite population in Lebanon.

Sources in the report indicated that so far, certain families have received payments ranging from $194 to $14,000. Hezbollah has also mobilized 145 reconstruction teams comprising over 1,250 engineers and hundreds of analysts and accountants.

The World Bank estimated in a report in November — before the ceasefire later that month — that losses to Lebanon’s infrastructure amount to some $3.4 billion.

Under the budget law, Iran’s presidential administration has allocated 650,000 barrels of oil per day to the IRGC for the next Iranian fiscal year, starting March 21, to export directly and the revenue from these exports is designated for “strengthening the defensive capabilities of the Islamic Republic.”