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Crude oil exports from Iran have topped 1 million bpd for the first time since 2019, Reuters has reported, citing data from cargo tracking providers.
Unsurprisingly, the buyer of most of the oil is China. In fact, some cargo trackers have been saying for years that Iran was exporting a lot more than official figures suggested using various tactics to mask the origin of the crude.
A further increase in oil exports could be on the way of the current round of nuclear talks between Iran and the United States end with a deal. This is the final stage of negotiations and, according to U.S. official sources, they would either end with a deal or with a "nuclear crisis".
"This can't go on forever because of Iran's nuclear advances. This is not a prediction. It's not a threat. It's not an artificial deadline. It's just a requirement..." said an unnamed official from the State Department who briefed media last week on the condition of anonymity.
"Given the pace of Iran's advances, its nuclear advances, we only have a handful of weeks left to get a deal -- after which point it will unfortunately be no longer possible to return to the JCPOA and to recapture the nonproliferation benefits that the deal provided for us," the official also said.
Nothing is certain, but the very prospect of a deal already weighs on prices. With high fuel prices worrying the White House, there could be additional motivation on the U.S. side to reach a deal with the Iranian side. If a deal is reached, Iran's oil exports could at some point rebound to the pre-sanction level of 2.5 million bpd.
"The U.S. government is attempting to tame oil prices by urgently negotiating a new nuclear agreement with Iran," Rystad Energy senior oil market analyst Louise Dickson told Reuters earlier this week. If a deal is struck, Iran could ramp up "crude and condensate production within four to six months, or even quicker as Iran is thought to have robust oil-on-water storage."
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.