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Iran Wants To Move Key Oil Export Terminal Out Of Persian Gulf

Strait of Hormuz 1

Iran plans to move its main oil export terminal from deep into the Persian Gulf to a terminal in the Gulf of Oman, AFP quoted Iranian President Hassan Rouhani as saying on Tuesday.

Moving the main oil export terminal from the Khark Island terminal to Bandar-e-Jask on the Gulf of Oman would result in Iranian oil tankers not having to pass through the critical chokepoint in the Gulf—the narrow Strait of Hormuz—which is being used for exports by both Iran and its rivals in the area, including Saudi Arabia.

Iranian oil export volumes are already being shifted from Khark Island in the Gulf to the terminal on the Gulf of Oman, and the move should be completed by the end of Rouhani’s term in office in 2021, the Iranian president said.

“This is very important for me, it is a very strategic issue for me. A major part of our oil sales must move from Khark to Jask,” AFP quoted Rouhani as saying in a televised speech.

The Strait of Hormuz is the world’s most important chokepoint, with an oil flow of 18.5 million bpd in 2016, the EIA estimates.

As the first round of U.S. sanctions on Iran kicked in last month and the second round of sanctions—including on Iranian oil exports—is set to snap back in early November, the Islamic Republic has recently stepped up rhetoric about controlling the most vital oil flow chokepoint in the world. U.S. Secretary of State Mike Pompeo rebuffed Iran’s claims, saying in a statement posted on Twitter: “The Islamic Republic of Iran does not control the Strait of Hormuz.”

Related: Oil Nears $80 Per Barrel

In other televised remarks today, Rouhani said that Iran would continue to export oil despite U.S. efforts to choke all of Tehran’s oil sales.

“We will continue by all means to both produce and export” oil, AP quoted Rouhani as saying on state television. “Oil is in the frontline of confrontation and resistance.”

According to some analysts briefed by Bloomberg, Iran may resort to various ways of reducing the impact of the U.S. sanctions on its oil exports, and those tactics include secret oil shipments without trackers on tankers, bartered trades, discounts, and extended credit periods on oil sales.

By Tsvetana Paraskova for Oilprice.com

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