Western sanctions force Iran to load oil on idled ships:report

A fleet of about 65 Iranian tankers are serving as floating storage facilities for Iranian oil in the warm waters of the Persian Gulf, each one given a nautical makeover to conceal its origin and make a buyer easier to find, the New York Times reported.

The paper cited one such ship, The Neptune, which it said had been floating in the Persian Gulf for a month.

Iran, OPEC's second largest oil exporter, has been reluctant to reduce its production, fearing that doing so could damage its wells.

"But Iran has insufficient space to store the crude it cannot sell. So while it furiously works to build storage capacity on shore, it has turned to mothballing at sea," the report said.

"We have never seen so many just waiting around," the paper quoted Rostam, a fisherman and smuggler who regularly works these waters as saying.

International oil experts say Iranian exports have already been cut by at least a quarter since the beginning of the year, costing Iran roughly USD 10 billion so far in forgone revenues. Many experts say the pain is only beginning, since oil prices have been falling and Iran's sales should drop even more with the European embargo that went into effect on Sunday.

The drop in crude sales has hit Tehran with multiple challenges. Besides the financial impact, Iran has to figure out what to do with all the oil it continues to produce. Iran is pumping about 2.8 million barrels a day