News / Middle East

Iran Crude Oil Exports Rise to Highest Since EU Sanctions

Petrochemical plant at an Iranian port. (2011 photo)  New sanctions target Iran's oil-dependent economyPetrochemical plant at an Iranian port. (2011 photo) New sanctions target Iran's oil-dependent economy
x
Petrochemical plant at an Iranian port. (2011 photo)  New sanctions target Iran's oil-dependent economy
Petrochemical plant at an Iranian port. (2011 photo) New sanctions target Iran's oil-dependent economy
Reuters
Iran's crude oil exports in December leapt to their highest level since European Union sanctions took effect last July, analysts and shipping sources said, as strong Chinese demand and tanker fleet expansion helped the OPEC member dodge sanctions.
       
Exports rose to around 1.4 million barrels per day (bpd) in December, according to two industry sources and shipping and customs data compiled by Reuters on a country-by-country basis and corroborated by other sources and consultants.
       
The sources said they expected exports to dip in January from the December peak ahead of new U.S. sanctions.
       
Western sanctions aimed at curbing Iran's disputed nuclear programme halved Iran's oil exports in 2012 from 2.2 million bpd in late 2011, leading to billions of dollars in lost revenue and a plunge in the Iranian currency.
       
But continuous robust demand from top buyer China and others such as India and Japan, as well as the purchase of new tankers, allowed the Islamic Republic to unexpectedly boost exports late last year.
       
The United States and the EU are hoping the economic pressure will force Iran to address international concerns about its nuclear programme, which Tehran insists is for peaceful purposes but the West suspects is for making weapons.
       
Salar Moradi, oil market analyst at oil and gas consultancy FGE, estimated that Iran shipped more than 1.4 million bpd of crude oil in December and forecast that exports would remain between 1.1 million and 1.3 million bpd in the first quarter of 2013.
       
This represents an increase from a low point of less than 900,000 bpd in September and suggests monthly revenues worth approximately $4.7 billion based on December Brent prices.
       
"They (Iran) bought a number of tankers from China and can now do more deliveries ... It's taken some pressure off Iran and facilitated tanker traffic and we are seeing higher exports to China,'' he told Reuters this week.
       
The second industry source said the rise in exports to near 1.4 million bpd was a result of traditional buyers finding new ways to secure shipping insurance.
       
But, like FGE, he estimated that they would fall slightly to around 1.3 million bpd in January.
       
Chinese Thirst

Chinese data showed the country bought 593,400 bpd of Iranian crude in December, the second-highest level of daily imports in 2012, a rise that Chinese officials also attributed to an easing of shipping delays.
       
Previously, Iran's tanker fleet had struggled to meet delivery schedules to China because EU measures in July barred Europe-based insurers from covering tankers that carry Iranian oil.
       
"China is saying let's up the numbers because no one is doing anything about it, and it looks like Obama has made a political decision not to go to war with Iran,'' said a senior source with a large independent trading house, referring to U.S. President Barack Obama.
       
Elena McGovern, oil and gas analyst at Business Monitor International, said: ``The implications of preventing Chinese imports from Iran would be too damaging to the (U.S.-China) bilateral relationship. I would be very surprised if Obama were to take China to task on Iranian imports.''
       
India's imports of Iranian crude were up 29 percent in December from November at around 275,000 bpd, according to tanker arrival data.

Tracking Iranian shipments has become increasingly difficult as companies have sought to conceal tanker movements from Western governments by turning off satellite signals.
       
Estimates of the Islamic Republic's monthly crude exports can vary considerably and are frequently revised.

New Sanctions Looming

A fresh round of U.S. sanctions coming into force next month
 could cap Iran's exports in the coming months as some buyers balk at the prospect of falling foul of the measures.
       
From Feb. 6, U.S. law will prevent Iran from repatriating earnings it gets from its shrinking oil export trade, a powerful sanction that the U.S. officials say will ``lock up'' a substantial amount of Tehran's funds.

       
"We continue to engage in close consultations with our international partners on U.S. sanctions with the objective of maintaining pressure on Iran to comply with its international obligations,'' said U.S. State Department spokesman John Finn.
       
"Month-to-month variability in crude oil purchases is not unusual,'' he added.
       
The International Energy Agency in December forecast a drop in Iranian exports to around 1 million barrels per day in late 2012 and early 2013.
       
But no matter how many rounds of sanctions are in effect, they are never watertight. Iran found creative ways to market its products and managed to sell more than 1.3 million tonnes of its fuel oil last summer, generating revenues equal to up to a third of its crude exports.
       
However, the latest data showed fuel oil exports have also taken a dip from the average 648,000 tonnes from July to October.

Exports fell to approximately 230,000 to 330,000 tonnes in December, Salar Moradi said, although he attributed this partly to higher domestic consumption in winter as utilities switch to fuel oil to replace gas used to meet heating requirements in the country.
       
In a more conservative estimate, data from a firm tracking Iranian fuel oil shipments showed that December exports were around 150,000 tonnes.

Condensate exports also fell by around 300,000 tonnes from November to 600,000 to 700,000 tonnes in December, data from the same firm showed. A Dubai-based analyst said condensate exports might come under further pressure as Iran's biggest customer in the Middle East has decided to reduce its purchases.

Dubai government-owned Emirates National Oil Co (ENOC) has started importing condensate from Qatar to replace sanctioned Iranian oil and is close to finalising deals with other producers, the company said on Sunday.

       
Still, some analysts think Iran will continue to find ways to safeguard against significant drops in its oil revenues.
       
"What we have seen is that when Iran is pushed to a do-or-die situation, they have looked for creative solutions to get around sanctions,'' said McGovern.
       
"The system will always find a way to cope.''

You May Like

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in pubic More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid