Iran Oil Exports to Plummet in November
SINGAPORE (Dispatches) - Iran’s oil exports have fallen sharply since U.S. President Donald Trump said at mid-year he would re-impose sanctions on Tehran, but with waivers in hand, the Middle Eastern nation’s major buyers could scale up orders as soon as next month.
But the exemptions granted to Iran’s biggest oil clients - China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey - which allow them to import at least some oil for another 180 days, could mean the exports start to rise after November. This group of eight buyers takes as much as three-quarters of Iran’s seaborne oil exports, trade data shows.
“The decision by the U.S. (to grant waivers) represents a departure, for now, from the stated aim of reducing Iran’s oil exports to zero,” said Pat Thaker, regional director for the Middle East and Africa at The Economist Intelligence Unit.
As a result of pre-sanctions pressure by Washington, Iran’s oil exports in November may not exceed 1 million to 1.5 million barrels per day (bpd), according to industry estimates, making them as little as a third of a mid-2018 peak.
“U.S. sanctions are expected to bring Iranian crude exports down to 1.1 million bpd in November,” according to S&P Global Platts Analytics.
Japan’s trade minister, Hiroshige Seko, though, has already said on Tuesday that Japanese buyers of Iranian oil are expected to resume imports from the Islamic republic after the country was granted a waiver from U.S. sanctions.
Japan and South Korea, both close US allies, had toed the Washington sanctions line and stopped buying crude from Iran.
India, Iran’s second-biggest oil customer, also cut orders ahead of the sanctions, hoping its effort to reduce reliance on Tehran would pay off in Washington and win it a waiver once the sanctions re-started.
Even China, locked in a bitter trade war with the United States, bowed to pressure from Washington and dialled back imports.
Trading sources said several Asian oil importers are already looking to increase their orders for Iranian oil soon.
“Enquiries for cargoes from Iran are ... coming in from several Asian buyers,” said one merchant trader, who declined to be named because he was not authorized to talk about his firm’s commercial activity.
The wide-ranging exemptions have cut fears of a supply shortage, taking pressure off companies, governments and economies around the world that have struggled with the surging cost for fuel.