Iran's crude oil exports plunged to 1.1 million bpd in the first seven days of October, sliding further down from 1.6 million bpd in September as we are just four weeks away from the return of the U.S. sanctions on Iran's oil, Reuters reported on Monday, citing tanker tracking data and an industry source tracking shipments.
Tanker shipments may vary week to week in a month, but the very low volumes in early October may suggest that Iran's crude oil exports are taking a hit and are falling faster than the market had expected just two-three months ago.
According to Refinitiv Eikon tanker tracking data quoted by Reuters, not a single tanker headed to Europe in the first seven days of October. Iran's tankers were bound for China, India, and the Middle East in the first week this month, according to the data.
Iran's crude oil and condensate exports started to drop noticeably in August and continued to fall through September and now October.
According to preliminary tanker tracking data compiled by Bloomberg, observed exports of Iranian crude oil and condensate plunged in September to 1.72 million bpd, down by 260,000 bpd month-on-month and the lowest level since February 2016. Related: "Profit Secrets of the World's Most Successful Energy Investors"
One tricky thing with 'observed' exports is that while officially and publicly visible Iranian tanker movements show a steep decline, shipping and trading sources tell S&P Global Platts that 'ghost' shipments may have already started to take place, with Iran thought to have been already switching off transponders on board of some tankers to conceal their destinations.
According to S&P Global Platts trade flow data, some one dozen Iranian oil tankers may have shut off their position devices last month. Nearly 207,000 bpd of Iran's oil exports that left Iranian oil terminals last month is reportedly unaccounted for, because of switched-off transponders.
The data visible in tanker tracking flows shows that Iran's exports in September dropped to all its key customers, including a 12.3-percent drop in shipments to China and a 16.7-percent decline in exports to India, according to Platts data.
By Tsvetana Paraskova from Oilprice.com
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Comments
There is no proof whatsoever that Iran’s oil exports have plunged to 1.1 million barrels a day (mbd) in the first week in October.
If no Iran tankers headed to Europe in the first week of October it is because 73% of all Iranian crude oil exports go to the Asia-pacific region with China accounting for 35%, India 33%, Japan and South Korea 5%. Another explanation could be ‘Ghost’ shipments with Iran switching off transponders on board its tankers to conceal destinations.
A week ago, Bloomberg, Goldman Sachs and other investment banks and analysts of different shapes and sizes claimed that India is going to cut its crude oil imports from Iran. It transpired, however, that India will buy a total of 9 million barrels of oil from Iran in November even after the US sanctions are implemented.
Moreover, India has already made it clear that it doesn’t recognize any sanctions except United Nations sanctions meaning that it will not comply with US sanctions on Iran.
India is now considering buying Iranian crude oil and paying for it in either a barter trade agreement or in a currency swap agreement.
The Trump administration is deluding itself when it says that it expects Iranian oil buyers to bring their purchases down to zero or sanctions will be imposed on them.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London