Oil smuggling has been so enormously profitable that no matter how many obstacles Washington and Brussels put up, the barrels kept flowing. With a daily turnover of $1 billion, the black market has been just too attractive. For the first time, however, I see cracks in the illicit business. Millions of barrels of unsold Iranian and Russian crude are accumulating in storage.

The reason isn’t just more U.S. and European sanctions and political pressure. Sure, they’ve helped. But the key factor is more mundane: The buyers of sanctioned crude oil have plenty of alternative aboveboard barrels available — at reasonable prices. Playing by the rules carries a smaller cost.

Buyers of sanctioned oil, notably India and Turkey, have been switching with ease over the last 60 days to unsanctioned barrels. For now, this means any glut of unsold crude is being concentrated in the shadows of the black market, away from the limelight of the world’s top oil-price benchmarks: Brent, West Texas Intermediate and Dubai.

© The Japan Times