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Iran oil exports hit six-year high
Tehran sold an average of 1.56 million barrels a day during the first three months of the year, almost all of it to China and its highest level since the third quarter of 2018, according to data company Vortexa, reported FT.
“The Iranians have mastered the art of sanctions circumvention,” said Fernando Ferreira, head of geopolitical risk service at the Rapidan Energy Group in the US. “If the Biden administration is really going to have an impact, it has to shift the focus to China.”
Analysts say Washington is disinclined to strictly enforce the “maximum pressure” sanctions regime introduced in 2018 by then-president Donald Trump, citing a reluctance by President Joe Biden’s administration to introduce an inflationary choke on global oil supply in a US election year.
In Tehran, the state Tasnim news agency said on Wednesday that the country’s oil industry had found ways to get around sanctions, adding that, since its main customer was China, it was largely shielded from western pressure.
Armen Azizian, a senior analyst and sanctions specialist at Vortexa, said the size of the fleet used by Iran to transport oil has grown by a fifth in the past year to 253 vessels, and that the number of supertankers carrying up to 2mn barrels of oil has doubled since 2021.
Virtually all Iranian oil sold this year has gone to China, according to Kpler, which tracks tankers around the world, and aggressively enforcing sanctions could destabilize not only the oil market but also the US-China relationship.
China relies on Iran for about a tenth of its oil imports but processes the oil not through its state-owned oil and gas companies but through smaller, private, refineries.
Iran’s oil minister Javad Owji said last month that oil exports had “generated more than $35 billion” in the preceding year. On another occasion, he said that while Iran’s enemies wanted to stop its exports, “today, we can export oil anywhere we want, and with minimal discounts”.
Soaring shale oil output over the past decade has made the US the world’s biggest producer, and freed Washington to be more aggressive with sanctions on other crude exporters. On Wednesday, it reimposed sanctions on Venezuela, another member of the OPEC
group.
The Biden administration has also been willing to release crude oil from its strategic stockpile, and has indicated that it could do so again if global prices move higher and push up domestic petrol costs.