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SINGAPORE / LONDON (Reuters) – Iran's oil exports have fallen sharply since US President Donald Trump announced he would reimpose sanctions in Tehran in the middle of the year, but that major buyers of Islamic Republic are already considering increasing their orders.
PHOTO FILE: A gas flare on an oil production platform in the Soroush oilfield near an Iranian flag in the Persian Gulf, Iran, July 25, 2005. REUTERS / Raheb Homavandi / File Photo
The initial objective of the sanctions was to reduce Iran's oil exports as much as possible, to cancel its nuclear and ballistic missile programs and to limit its support to militant proxies, particularly in Syria, Yemen and Lebanon. .
But exemptions granted to Iran's largest oil customers – China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey – allow them to import at least a little oil for another 180 days and could allow exports of start to increase after November.
According to Refiniv Eikon, this group of eight buyers imported more than 80 percent of Iran's oil exports by about 2.6 million barrels a day (bpd) a year.
GRAPHIC: Exemptions have been granted to Iranian oil imports from 8 countries – tmsnrt.rs/2D30JeW
"The US decision (to grant waivers) represents a departure, for now, from the stated goal of zeroing Iranian oil exports," said Pat Thaker, regional director for The Economist Intelligence Unit, responsible for the Middle East and Africa region.
Iran's crude oil exports fell significantly, from at least 2.5 million bpd in April, before Trump in May pulled the United States out of a 2015 nuclear deal with Iran and imposes penalties, although estimates vary.
Due to pressure from Washington before the imposition of sanctions, Iran's oil exports in November are not expected to exceed one million to 1.5 million bpd, according to industry estimates. Companies monitoring Iranian shipments are already seeing a drop in tanker activity this month.
"We have seen so far only 10 tankers loading Iranian terminals or reporting Iranian terminals for the time being, which is much lower than what we usually see at the beginning of this month," he said. said Kpler, an information society.
According to Refinitiv Eikon data, Iranian crude oil exports fell to 1 million barrels a day in November.
An industry source who also monitors such shipments said the figure was probably low.
Iran expects to maintain its crude exports of at least 1.1 million bpd after the reimposition of sanctions, said a source close to Iranian thought because the global market is too stretched to allow a complete stop.
In October, Iran's crude exports were estimated at 1.82 million bpd by Kpler and 1.5 million bpd by another Iranian expedition monitoring company.
JAPAN TO BE TAKEN
Japanese Commerce Minister Hiroshige Seko said Tuesday that Japanese oil buyers in Iran should resume imports from the Islamic Republic after the country has received a waiver of US sanctions.
S & P Global Platts said Tuesday that South Korea would be able to take about 4 million barrels of Iranian crude a month (130,000 barrels a day) under a US sanctions waiver.
Japan and South Korea, close allies of the United States, had respected the sanctions imposed by Washington and stopped buying crude oil from Iran.
India, Iran's second largest oil consumer, has also reduced its orders before the sanctions, hoping its efforts to reduce its dependence on Tehran would bear fruit in Washington and that it would obtain a waiver once penalties restored.
Even China, struggling with a fierce trade war with the United States, has bent to Washington's pressure and cut back on imports.
GRAPHIC: Iranian Oil Exports – tmsnrt.rs/2PabBPs
OUT OF THE SITTING
Trade sources said several Asian oil importers were looking to increase their Iranian oil orders in the near future.
Two Chinese sources familiar with the case said the country would be allowed to buy 360,000 b / d of Iranian crude during the exemption period.
That would be about half of the daily average that China imports from Iran since January 2016, according to trade data.
One source stated that the United States had attached certain conditions to the import franchise, including the disclosure of information by counterparties and the establishment of open methods of settlement, which were under evaluation before placing new orders in Iran.
Both sources were not allowed to talk to the media about sanctions imposed by Iran and refused to be identified.
A trader, who also refused to give his name, said that "inquiries regarding cargoes from Iran … come from several Asian buyers".
The numerous exemptions have eased fears of a supply shortage, relieving companies, governments and economies around the world facing soaring fuel prices.
Trump, faced with crucial mid-term elections that may cost Republicans control of the US Congress, said Monday that he wants to gradually impose sanctions on Iran's oil, citing concerns over shocking markets and an outbreak world prices.
This helped to mitigate the risk of sanctions, raising the Brent crude international benchmark, LCoC1, to a four-year high, nearing $ 87 per barrel in early October.
Brent prices are now about 15% below this peak and have barely moved in the last two sessions.
Now, it will be essential to watch "what will happen after 180 days, after expiry of the exemptions," said the trader.
Iranian oil exports rose sharply after the lifting of the previous round of sanctions in early 2016. Shipments, including condensate, an ultra-light oil, hit a record high of about 3 million barrels per day in mid-2018, according to commercial data from Refinitiv Eikon.
Additional report by Ahmad Ghaddar in London; Edited by Tom Hogue and Dale Hudson
