London-based commodity markets data company Kpler tells VOA it believes Iran recorded a big increase in energy exports last year, even as the United States continued its policy of demanding a global ban on Iranian oil sales.
In a phone interview from Paris on Wednesday, Kpler senior oil analyst Homayoun Falakshahi said the company estimates that Iran's average daily exports of crude oil and gas condensate grew from 668,000 barrels per day in 2021 to 900,000 barrels per day last year. That would represent a jump of 35% for 2022.
He said Kpler uses a variety of sources to calculate those estimates, such as location data from oil tankers' Automatic Identification System transponders, satellite imagery, and information provided by personnel at ports.
Iran does not publish official data on its energy exports as part of its efforts to circumvent U.S. sanctions that President Joe Biden’s predecessor, Donald Trump, unilaterally imposed on Iranian global oil sales in 2018 and later toughened.
In November, Iranian state-approved news site Kayhan quoted Iran’s oil minister, Javad Owji, as saying Tehran had managed to boost its exports of crude oil, gas condensate and petrochemical products to the highest level since the March 2018-March 2019 Persian year. No figures were cited.
Falakshahi also discussed the factors behind Iran's apparent strong energy sales growth in an earlier phone interview recorded January 11 for VOA's Flashpoint Iran podcast. The following transcript has been edited for length and clarity:
VOA: What do you think is behind such a big jump in Iran's exports of crude oil and gas condensate?
Homayoun Falakshahi, senior oil analyst, Kpler: I think it's a combination of things. First of all, since the end of 2020, we've had a rebound, generally speaking, in the oil market. And so supply and demand continued to grow in 2022, at around a bit less than 2 million barrels per day. So the market got bigger, and obviously there was a bigger share for Iran as well.
But also, looking at the [export] methods that are being used, it's the fact that, generally speaking, Iran is feeling a bit more confident in how much oil it can ship.
And we went through a big crisis with energy prices throughout 2022, especially in the first half of the year. And that meant that the U.S., to an extent, could not afford to tighten the screws on how much Iran was shipping to China, because if the U.S. did that, it would have meant less oil in the market and that could have pushed prices a bit higher too.
VOA: You mentioned that Iran appeared to be feeling more confident in terms of exporting its oil last year. What do you think is behind that greater confidence?
Falakshahi: I think to an extent they had to fight for market share more than they had, compared to the previous years. And it's a geopolitical issue as well.
We are seeing a lot more Russian oil in Asia. At the beginning of the Russia-Ukraine war, we had seen a big increase in Russian exports to Asia, mostly to India, but also to China.
At the same time, around April to May 2022, just after the war started, we saw around a halving of exports from Iran to China. That means the National Iranian Oil Company (NIOC) had to fight in order to get back its market share. We believe that they offered larger discounts to Chinese buyers in order to do that.
In the second half of 2022, we saw a major increase in oil getting into China. For example, in December, arrivals [of oil shipments] into China came close to an all-time high—the second highest ever on a monthly basis. China is the main buyer of Iranian oil. So, if China buys more oil, that means more oil from Iran as well.
VOA: You talked about Iran having to engage in a bit of a price war last year to keep up its exports to major customers like China. How does that price war behavior affect the amount of money that Iran gets from its oil exports?
Falakshahi: Well, if you assume that the volumes stay the same, then obviously it is affected in a negative way. But revenues are a function of volumes and prices. So, if you reduce your pricing by, let's say, 10%, and on the other hand, you increase your volumes by just as much, then there's no negative impact on revenue.
So given the fact that the Iranians increased their exports by about 30% year-on-year in 2022 compared to 2021, and given the fact that prices, globally speaking, have been higher in 2022 compared to 2021, we believe that — despite the fact that they had to offer large discounts especially since May 2022 — they probably had an increase in revenues year-on-year compared to 2021.
VOA: Do you have any idea how much revenue Iran actually made from its energy exports last year, or is that unclear based on what the Iranians themselves are saying and what you are seeing from your own research?
Falakshahi: That is something that's extremely difficult to assess because it's not exactly clear how much the Iranians are getting paid.
Obviously, the pricing is not transparent. But also, the amount of actual trade going on, or whether they're able to bring back the revenues from this trade into the country, is absolutely unclear.
We know for a fact that even before the U.S. exited the Iranian nuclear deal in 2018, at a time when secondary U.S. sanctions were lifted, it was already difficult back then for NIOC to get access to revenues from its oil exports.
So, there's a big mystery about the pricing, and a big mystery about how much of that revenue they're able to bring back.
But if you look at the amount of Iranian exports [last year], and you assume an average oil price of $65 to $70 per barrel, and you take into account the discount that they have to give [to customers], you should get somewhere between $20 and $25 billion [in revenue for 2022].