Iranian oil exports to increase

TOKYO: Asia’s top buyers of Iranian crude have cut purchases by about 15 percent so far this year, but shipments may start rising after six world powers agreed to ease some sanctions.

Tough US and EU sanctions have slashed exports from the Opec member by more than half, to about 1 million barrels per day ( bpd), costing it as much as $80 billion (R818bn) in lost revenue since early last year, the White House estimates. That pressured Iran to the negotiating table with world powers over its controversial nuclear activities, resulting in a historic deal giving Tehran some relief for its shattered economy.

India has already said it might start buying more crude from Iran. Iran can also transfer some of the billions in petrodollars that have been held up in purchasing countries. Imports by Iran’s largest customers – China, India, Japan and South Korea – dropped to 924 560 bpd this year, down from 1.087 million bpd in the same period a year ago, say customs reports and tanker data from trade sources.

India made the deepest cuts this year as two of its state-run refiners worried about constraints to insurance coverage for tankers carrying Iranian oil and refineries processing it.

Although the Geneva deal doesn’t allow Iran to boost oil sales for six months, India has room to raise its imports after cutting them about 40 percent.

India may buy more crude from Iran in the next four months and intends to increase purchases further in the next fiscal year, its top oil bureaucrat said on Wednesday.

Underlining the depth of Iran’s pain from the sanctions, its biggest customer, China, imported just under 250 000 bpd of Iranian crude in October, the lowest level since June 2010.

Japan, which has struggled to cut its Iranian crude purchases this year after reducing them more than 40 percent last year, imported 127 279 bpd in October, down 19 percent, the country’s trade ministry said yesterday.

South Korea’s imports of Iran oil fell 9.2 percent to 132 648 bpd between January and October.

The US believes the impact on Iran from its and the EU’s sanctions forced Tehran to the negotiating table, and Washington has stressed that Tehran has to take concrete steps within six months for further easing of the measures. The EU and the US believe Iran is developing nuclear weapons, while Iran says its programme is for power generation.

Iran is quietly mobilising more ships to store and transport oil, aiming to keep its fields working and mitigate losses while the sanctions remain in place.

“It’s not like Iranian exports will jump by another 1 million bpd straightaway,” said an official. “That’s why apart from the huge fall in oil we saw on Monday, prices have stabilised and are moving sideways.”

Government and refinery officials in India have said they believe the grant of the next six-month waiver is a formality after the Sunday deal between the world powers and Iran.

Iran’s oil sales were expected to fall sharply in October to their lowest in months at about 719 000 bpd, according to sources who track preliminary tanker loading plans. – Reuters