Iranian oil exports soar as Tehran evades sanctions and finds new buyers

On the high side, US-based TankerTrackers.com, which uses satellite imagery to track deliveries, estimated Iranian crude oil exports at 1.2 million barrels per day during the fall, up from 481,000 barrels per day in February.

Meanwhile, SVB International in Washington said Iran exported 585,000 barrels of crude oil per day in November, up from 230,000 earlier in 2020. Petro-Logistics saw an increase in exports to about 447,000 barrels per day, from 222,000.

The more conservative numbers suggest that US sanctions have bottled most of the Iranian crude. But the surge seen among the three market followers suggests that Tehran has been more successful in selling its oil recently.

Secretary of State Mike Pompeo said last year that the US was aiming for zero oil exports from Iran, having previously tried to bring them below 1 million barrels per day, down from its 2018 pre-sanction levels of 2.5 million barrels per day.

One of Iran’s largest buyers is China, which, according to Beijing’s official trade statistics, imported 62,000 barrels of Iranian oil per day in October, up from zero in June. Industry viewers said actual totals were likely much higher and included oil skipped by other Asian countries.

Venezuela – under socialist leader Nicolas Maduro, long in conflict with Washington and under US sanctions – has also begun to buy Iranian gasoline. And Syria has resumed Iranian oil imports this year, according to ship trackers and an Iranian oil official.

Iranian shippers have made increasing efforts to circumvent sanctions by disabling radio transponders to prevent tracking, while operators carrying Iranian crude oil have changed the names of their ships or bills of lading.

More recently, they have begun oil shipments in regions once considered too risky, including waters off the coast of US allies Iraq and the United Arab Emirates, according to people familiar with the matter.

US officials acknowledge that Iran is exporting oil, but say sanctions have still had severe economic consequences for the country, including sending the rial sharply lower.

The Iranian currency has depreciated 85% since early 2018, while inflation of over 30% in Iran has turned meat into a luxury product. Last year’s government cutbacks sparked protests that killed hundreds.

Mr Pompeo has said that sanctions have cut Iran’s oil revenues by $ 70 billion since May 2018 and that easing pressure on Tehran would be a dangerous step. In November, Keith Krach, the state undersecretary who oversees energy policy, described US sanctions against Iran as “remarkably effective.”

Iran will be one of the biggest foreign policy challenges that President-elect Joe Biden will face when he enters the White House in January, and his transition team has said there are likely to be policy changes, including an attempt to rejoin to the 2015 nuclear agreement with Iran. Jake Sullivan, appointed as Mr Biden’s national security adviser, said this month that the government would be willing to comply with the terms of the deal – a move likely to require a rollback of U.S. sanctions – and use it as a basis for follow-up actions. talk about broader concerns.

Most oil buyers and shippers stopped trading with Iran after Washington imposed a full embargo on Iran’s crude oil supply after the Trump administration pulled out of the Obama-era nuclear pact with Tehran in 2018.

Iranian traders and some potential buyers said they expected US pressure to ease once Mr Trump leaves his office.

The Iranians “need to sell oil, and we need energy,” said an official in Italy, formerly a top customer of Iranian crude oil. Purchases will restart soon once sanctions are lifted, this official said.

Meanwhile, the resurgent Asian economies are seizing the steep discounts offered by Iranian traders. An adviser to a major Chinese oil company said Iran was offering discounts of up to $ 1 a barrel for crude oil. Traders also sell refined products at lower prices.

Commodity trader Ali Amirliravi said Iran offered a discount of $ 70 per ton of propane, making it 16% cheaper than Saudi Arabian propane. Buyers in China, India and South Korea have all sought Iranian crude oil, according to another Iranian trader, who said he had talked about cargoes but had yet to complete a sale.

In March, Syria resumed Iranian oil imports after trade was halted by indirect US pressure. Washington forced some countries that had allowed Iranian tankers to register under their flag to withdraw those registrations. Iran resumed sales to Syria by sending its own fleet of Iranian-flagged ships.

This summer, oil-rich Venezuela began to buy Iranian gasoline after refineries virtually shut down, in part due to individual US restrictions on Caracas.

In July, the US intercepted four tankers of Iranian fuel bound for Venezuela, seized the fuel and threatened to seize Greek carriers. According to shipping tracker Marine Traffic, Iran sent three of its own tankers, over which the US has less power, to deliver gasoline to Venezuela in September.

Write to Benoit Faucon at [email protected]