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Iran’s Oil Cargoes To Europe Surge Since EU Eased Sanctions

Crude Oil

Iran is trying to restore its pre-sanctions market share of oil shipments to Europe and has sent many crude tankers to European countries since the EU lifted most of the trade and financial restrictions on Iran in January 2016.

Last year, there were 21 crude oil cargoes that made a voyage from Iran to France, another 15 to Italy, 14 to Greece, and 13 to Spain, including shipments with very large crude carriers (VLCCs), Suezmaxes, and Aframaxes, Platts reported on Wednesday, quoting a report by UK-based shipping consultancy VesselsValue.

Since the removal of the sanctions, Iran’s customer base has increased with new players ranging from clients in Europe to such in Malaysia and Singapore, according to VesselsValue.

Iranian crude exports via tankers jumped to 563 shipments last year from 66 in 2012, when the sanctions were imposed, and up from 277 in 2015, VesselsValue data shows.

Iran’s crude oil and gas condensate exports were expected to rise to about 2.2 million bpd last month from some 2.16 million bpd in January. Europe’s share of Iranian oil exports was 767,000 bpd in December 2016, up by 10 percent from November, and very close to pre-sanction export levels that averaged 800,000 bpd.

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Not only destinations of Iranian crude were diverse in 2016, the countries of origin of the owners of ships being used to transport oil have also diversified. During the sanctions, the National Iranian Tanker Company (NITC) was the biggest company providing ships to load from Iran, followed by Irano Hind, Idemitsu Tanker, JX Ocean and Kline. NITC continues to be the leading shipowner of vessels carrying Iranian crude, but now shipowners include such from Belgium and Greece, VesselsValue’s report says, as quoted by Platts.

According to trade sources and S&P Global Platts trade flow data, two Iranian VLCCs delivered a mix of Iranian heavy and light crude grades to Shell at Rotterdam last month.

Europe may have lifted primary sanctions on Iran, but U.S. sanctions are still in place, making Iranian crude export growth prospects uncertain. The U.S. slapped new sanctions on Iran in early February, targeting 13 individuals and as many companies, in response to an Iranian ballistic missile test just days earlier.

According to VesselsValue, as quoted by Platts:

“Iran’s crude export program could be curtailed even more if there are any further provocations from them.”

By By Tsvetana Paraskova for Oilprice.com

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