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Iran will allow private companies to start exporting crude oil as part of its efforts to counter U.S. sanctions against its oil industry, Reuters reports, quoting the country’s First Vice President Eshaq Jahangiri.
“Iranian crude oil will be offered on the bourse and the private sector can export it in a transparent way,” Jahagiri said, adding that “Oil is already being offered on the bourse, about 60,000 barrels per day, but that has been only for exports of oil products.”
Iran exports crude oil and condensate at a rate of 2.5 million bpd. Taking this off the market, an Iranian official said earlier this month, “in a period of a few months is impossible.”
Last week, the U.S. asked its allies to cut oil imports from Iran to “zero” by early November when the U.S. sanctions on Tehran return, causing oil prices to rise on expectations that more Iranian barrels could be taken off the market than expected as the U.S. Administration looks determined to choke off as much Iranian oil exports as possible.
Later the White House increased the pressure, threatening sanctions for any country that continues to import Iranian crude after the November 4 wind-down deadline. Most buyers of Iranian crude had hoped for waivers and have been actively seeking them in the past couple of weeks, but Washington’s stance seems to be toughening by the day.
Hopes in the Trump administration are that other Middle Eastern producers will step in to compensate for the shortfall in supply, notably Saudi Arabia and possibly its Gulf allies.
Iran, however, is not giving up. "We will surely do something to thwart the US rallying cry that Iranian oil [exports] must be stemmed," Jahangiri said in a speech over the weekend. "The [Iranian] government has a plan ... and God willing we are certain that we will be able to sell as much oil as we want."
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.