With ever-tighter sanctions clamping down on Iran, the oil-rich nation is finding itself awash with oil it simply cannot sell, reports the New York Times. Iran has already reduced production by 1 million barrels a day to 2.8 million, but reducing production too much could damage its wells, and the surplus oil has quickly filled its 10 million barrels of holding capacity. Iran has turned to storing about 40 million barrels of oil in ships in the Persian Gulf while it rushes to boost storage capacity on land. Around 65 tankers have been repainted to conceal their true identities while Iran desperately seeks oil buyers.
Iran's oil exports have fallen by a quarter so far this year, costing it about $10 billion. And with a European embargo kicking in last Sunday and oil prices continuing to fall, times are only going to get tougher for the country. Kenya just canceled an 80,000-barrel-per-day contract, and South Korea's imports have fallen 50%. "They are getting squeezed," says a former executive for Saudi Aramco. "It's too much trouble to buy Iranian oil. Why alienate the United States and Europe? And the rest of OPEC is not very happy with Iran either." (Read more Iran stories.)