Iran ships up to 2 million barrels of fuel oil bound for Singapore

(Reuters) - Iran has started moving nearly two million barrels of fuel oil to Singapore in the first such shipment since June, according to an Iran-based port source and Reuters shipping data on Thursday.

Asia's top marine fuel trading hub secured exemption from U.S. financial sanctions on Iran late in June, after authorities leaned on oil companies operating in the city state to cut dealings with Iran.

Although Singapore had been left off the first list of nations exempted from U.S. sanctions, it secured the reprieve after showing a significant dip in oil imports from Tehran.

Shipping data shows the Iranian owned supertanker Leadership, which is set to arrive in Singapore sometime in early October, departed Iranian waters this week.

The Very Large Crude Carrier (VLCC) was one of three supertankers that have been anchored off Iran's key export facility of Kharg Island, holding fuel oil and waiting for a buyer, an Iran-based shipping source told Reuters.

"The vessel departed three days ago, but had been waiting for instructions since early July," the source said. "We were informed that they were waiting for buyers."

The ship is currently passing India's west coast, Reuters data shows. Vessel transponder that had been switched off since May 29 were turned back on August 14, according to the data.

NIOC officials responsible for the marketing of fuel oil could not be reached for comment.

IRANIAN FUEL OIL IMPORTS

Residual fuel, which is typically used for refueling ships and for power generation, makes up the bulk of Iranian oil imports into Singapore.

Imports of fuel oil from Iran fell to 38,000 metric tons in July, nearly 84 percent below those in June and well off a peak of 561,000 metric tons in February, data from trade agency International Enterprise show.

Average monthly imports of fuel oil from Iran this year stand at 258,000 metric tons, 59 percent lower than last year's 624,000 metric tons.

U.S. sanctions aim to slash the flow of oil revenues to Iran in order to try and force it to curb its nuclear program, which the West believes is being used to develop a bomb. Tehran says it needs nuclear reactors to supply electricity.

Singapore is one of the world's biggest oil trading centers and fuel arriving in the city state from Iran is typically blended, stored, traded and transported from one ship to another by private companies operating on the island and in surrounding waters.