THOMAS ERDBRINK & CLIFFORD KRAUSS

The hulking tanker Neptune was floating aimlessly this week in the warm waters of the Persian Gulf, a fresh coat of black paint barely concealing its true identity as an Iranian ship loaded with hundreds of thousands of barrels of oil that no one is willing to buy.

The ship's real name was Iran Astaneh, and it was part of a fleet of about 65 Iranian tankers serving as floating storage facilities for Iranian oil.

Iran, faced with stringent economic sanctions imposed by the international community to force it to abandon any ambitions to develop nuclear weapons, has been reluctant to reduce oil production, fearing 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.

After years of defiance and insistence that sanctions were barely being felt at home, Iranians are acknowledging the latest round with growing alarm. President Mahmoud Ahmadinejad on Tuesday said they were "the strongest yet."

International oil experts say Iran exports have already been cut by at least a quarter since the year beginning, costing Iran roughly $10 billion so far in revenues. Many experts say the pain is only beginning as sales should drop even more with the European embargo. "We are now forced to sell our most valuable export product in secret," said Nader Karimi Joni, an Iranian journalist.

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