Sanctioned producers Iran, Russia and Venezuela are competing to ship oil to Asia in a newly emerging dark market, according to Vortexa.

The data platform is tracking 11 tankers that have loaded Russian crude and that had previously been carrying Iranian oil.

Some of the 11, mostly aframaxes, were involved in ship-to-ship transfers with their AIS trackers switched off. They accounted for 16 loadings since April.

The surge in Russian crude shipped to Asian markets has forced some Middle East suppliers to reduce prices in the face of the competition, Vortexa said in an analysis of the oil and gas sectors.

The three countries are competing for limited markets in India and China, which had been relatively conservative in buying Russian crude, said its analysts.

“There is an interesting type of dark market now opening up that’s becoming pretty big,” said Vortexa chief economist David Wech.

“Some knock-on effects are also hitting other players, like Iraq, for example, that is now struggling a little bit more to place its barrels, especially in the Asian market.”

Iran’s oil exports in January 2022 were the highest since sanctions were imposed but have fallen back since the invasion of Ukraine in February.

Russia turned to alternative markets after it was hit with sanctions and embargoes, and Chinese buyers benefited from the competition between the two, said Vortexa.

“As more companies scale back from carrying Russian crude/products, those familiar with the sanctioned crude trade will continue using their tankers to assist Russia in exporting oil East of Suez,” said crude market analyst Armen Azizian.

The trend is the latest example of changing oil flows following Russia’s invasion of Ukraine and sanctions led by the US and the European Union. The US has ended oil imports from Russia, while the EU will introduce a ban on seaborne Russian crude by December.

Tanker traffic from the US, Brazil and Guyana to Europe has increased to fill the gap of lost Russian crude, which was markedly down from previous years, said Vortexa.

The shift in flows has provided a fillip to VLCCs on the US to Europe routes to take advantage of economies of scale.

VLCC time charter equivalent rates have risen to -$8,665 per day, their highest since mid-April, according to the Baltic Exchange.

It last assessed VLCC TCEs above zero in January 2021.