Iran’s crude oil exports have this month swollen to more than 2 million barrels daily, including condensates, and may remain elevated at a time when other OPEC members are shrinking their own exports.
This is according to TankerTrackers.com and represents a significantly higher figure than what other analytics companies have as numbers for Iran oil exports. It is also significantly higher than what official Iranian sources say the country is exporting.
Kpler, for instance, said this month that China was importing Iranian crude at a rate of 1.5 million bpd. China is the biggest buyer of Iranian crude, so almost 100% of export oil goes there.
Data analytics firm OilX, part of EA Group, puts Iranian oil exports—excluding condensates—at some 1.4 million barrels daily for August based on preliminary data. OilX noted the month is not over yet and we might yet seen a further increase in overseas oil shipping.
Iran’s Mehr News Agency earlier reported that Iran was exporting 1.4 million barrels daily in August, citing the head of Iran’s Planning and Budget Organization.
Bloomberg notes in a report that Iranian oil reports are notoriously difficult to calculate because, for obvious reasons related to U.S. sanctions, the country does not release public reports on its oil flows overseas. Related: European Natural Gas Prices Slump On Hopes Australia Will Avoid An LNG Strike
Production has also been on the rise. Earlier this month, oil minister Javad Owji said that Iran’s crude oil production stood at 3.18 million barrels daily and was about to rise to 3.3 million barrels daily by the end of August.
Also this month, the head of the state-owned oil company said there were plans to increase oil production to 3.5 million barrels daily by the end of September.
In further news from the Iranian oil sector, the country’s first vice president said this month the government eyed putting into operation unfinished projects worth $15 billion by next March. Last year, Iran completed $12 billion worth of started but unfinished projects in the oil and gas field.
In other words, Iran is boosting both production and exports of crude oil despite U.S. sanctions that specifically target the oil industry as vital for the country’s budget. Those sanctions appear to be falling short of the stated intention of reducing Iran’s oil exports to zero.
"Sanctions are in place but perhaps they are not fully implemented or monitored," Sara Vakhshouri, an analyst with SVB, told Reuters earlier this year in comments on Iranian oil flows overseas.
"Also all of these supply volumes are in the dark market, where there is no transparency and so they are not reflected in formal global supply and export data."
The latter remark highlights that the failure of the sanction regime to squeeze Iran’s production or exports of crude oil does not mean it is easy for Iran to export the commodity. The country has been using ship-to-ship transfers and tankers switching off their location indicators to mask the destination of the cargo. This has represented a major challenge for cargo tracking service providers in estimating how much oil Iran is actually exporting.
Meanwhile, the Biden administration has signaled it would return to the so-called nuclear deal, short for the Joint Comprehensive Plan of Action on Iran’s nuclear program. Negotiations have been dragging for months with no final agreement in sight.
However, this month saw a momentary breakthrough when Iran and the U.S. agreed a swap of five U.S. prisoners for unfreezing some $6 billion in Iranian assets in South Korea. It is unlikely to lead to anything else in the way of progress on the nuclear talks, where the two sides cite irreconcilable differences that would necessitate concession-making on both sides.
While diplomats do their jobs, oil will continue to flow out of Iran, apparently at elevated rates last seen in pre-sanction times, taming international prices even as analysts forecast shortages in the second half of the year.
By Charles Kennedy for Oilprice.com
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