When international sanctions were eased on Iran in the early part of January this year; analysts predicted the country would be exporting a massive amount of oil. However, Iran’s oil exports are growing at a much faster rate than the anticipations of oil market experts.
According to the data obtained earlier by Reuters, Iranian oil exports to Asian countries has elevated by 13% from a year ago.
Iran is Organization of the Petroleum Exporting Countries’s (OPEC) No. 3 producer that suffered a major setback when sanctions were imposed on it. Iranian crude oil exports were cut down from a peak of 2.5 million bpd to merely 1 million barrels per day (bpd). Before Western sanctions were put in the country, Iran used to produce around 3.7 million barrels of oil daily.
This April, the overall oil output of OPEC has risen the highest in recent history as Iran and Iraq’s oil production has increased manifold. The third largest supply increase in April came from the UAE. Surprisingly enough, the top exporter, Saudi Arabia has made no changes in its oil output despite its claim of boosting the supply at an OPEC meeting held on April 17.
Tehran, the capital of Iran, had witnessed the sharpest increase in its crude oil production as the country is determined to recover its market share before the sanctions were imposed. As mentioned by the Bloomberg report, Iran exported more than 2 million bpd during the first half of April. Comparing it to the 1.45 million barrels of oil it produced in March of this year, this shows Iran is going on a pretty fast production speed.
In the month of February, when oil producers such as Venezuela and Russia talked about an output freeze on crude oil’s production, Iran was clear on the point that it would not participate in any such activity until it has reached its pre-sanction production level.
Iran’s imports would have been even higher had Japan not bolted the loadings in March because of the ongoing shipping insurance concerns. Because of the current issue, Japan’s shipments fell a steep low of 72%, equaling 20,000 bpd. The insurance shipping problems have been resolved now though.
Most of Iran’s crude oil production is exported to the Asian countries that includes China, Japan, India and South Korea. Having a vivid increase of 13% in its export to the Asian countries is certainly good news for the country.
According to official government statement and tanker-tracking data, Iran’s largest oil countries jointly imported 1.3 million bpd in April. South Korea’s imports from Iran have risen by 90% equaling 237,000 bpd. Though Iran’s oil imports to India has increased by 50%; 390,000 bpd, its imports to China have fallen by 5% to reach just over 670,000 bpd.
Speculations indicate that some of the crude oil might have come from storage that has been given a temporary boost to Iran’s April supply. It might be challenging for Iran to increase its crude oil market share as Middle Eastern countries are also pushing for more market share with the recent surge in crude oil prices.
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