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Iran’s crude oil and condensate exports are set to drop to a total of 64 million barrels this month, or 2.06 million bpd—the first time that monthly crude and ultra-light oil shipments out of Iran will have fallen below 70 million barrels since April 2017, according to preliminary trade flows data by Thomson Reuters Eikon.
The August shipments of Iran’s crude oil and condensate are on pace to average 2.06 million bpd, which compares with a peak of 92.8 million barrels, or 3.09 million bpd, for April this year, the month before the U.S. withdrew from the Iran nuclear deal and reinstated sanctions on Tehran. The first round of U.S. sanctions kicked in earlier this month, while the sanctions on Iran’s oil exports—which the U.S. targets to bring to ‘zero’—will snap back in early November.
The key Iranian customers have all scaled back loadings in August, with top client China expected to see 18.4 million barrels coming in from Iran this month, down from the highest monthly volume this year, 24 million barrels set in July, Reuters data showed.
Iran’s exports to India plunged to 8.2 million barrels, down from more than 20 million barrels in the previous months, according to the data, but the destination of some 11 million barrels of Iranian oil is yet to be identified, so Indian imports may be higher than 8.2 million barrels this month. Japan is cutting imports for a second consecutive month, while also for a second month in a row, South Korea is not importing Iranian oil.
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Between August 1 and 16, Iran’s exports plunged by 600,000 bpd compared to July loadings, Platts preliminary tanker tracking data showed earlier this month. Iranian oil exports averaged 1.68 million bpd in the first half of August. This compares to average exports of 2.32 million bpd in the whole month of July, and to 2.10 million bpd in the first 16 days in July, according to S&P Global Platts estimates.
Aiming to retain its current customers, Iran is slashing its official selling prices (OSPs) for its flagship crude grades to multi-year lows compared to similar varieties of the Saudi crude grades.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.