For the first time in several months, a tanker with Gulf crude oil is making its way to Europe, marking a significant development in the oil trade. The vessel, Advantage Victory, carrying about two million barrels of Iraqi oil, passed through the Strait of Hormuz on May 27 and is scheduled to arrive in Rotterdam on July 7.
This journey is particularly noteworthy as it represents the first shipment of Gulf crude to Europe since the New Vision left on March 1. The Advantage Victory was loaded with oil at Basra, Iraq, in late February and early March.
Since the beginning of March, a total of 103 tankers have departed the Gulf, transporting an impressive 185 million barrels of oil. However, almost all of these shipments were directed away from Europe, with 84% rerouted to Asia and the Middle East instead.
Complicating matters, Iran has instituted a transit fee of $1 per barrel for tankers passing through the Strait of Hormuz, a fee that must be paid in cryptocurrency, particularly Bitcoin. For a large tanker like the Advantage Victory, this translates to a toll of $2 million just for the passage.
Scaling this up, if we consider all 103 tankers and 185 million barrels since March, this could create a substantial revenue generation opportunity for Iran amounting potentially to $185 million in digital assets.
It’s important to note that while the Advantage Victory makes headlines, it doesn’t necessarily indicate the establishment of a reliable trade route. The journey is significant simply because it stands alone; the previous 102 tankers have taken different routes.
Data from Kpler indicates there has been a fundamental shift in oil trade patterns due to escalating tensions between the US and Iran. Whether the Advantage Victory signifies a tentative reopening of the Gulf-to-Europe corridor or merely remains an anomaly is contingent upon future developments in the Strait.
For investors focused on cryptocurrency, the pressing question is whether the Bitcoin toll imposed by Iran spurs noteworthy demand. The $1-per-barrel fee could potentially drive a surge in crypto consumption, yet the extent of the traffic flowing under this fee scheme remains ambiguous. Many shipping companies may hesitate to comply with Iran's payment requirements, which helps explain the limited number of tankers opting for the Europe-bound route.
Shipping companies that pay Iran's toll in Bitcoin may find themselves exposed to secondary sanctions risks. Stakeholders should monitor several key variables moving forward: the frequency of additional Gulf-to-Europe shipments, any official responses from Western nations regarding Iran's cryptocurrency toll, and whether the toll structure undergoes changes or expansions.