According to analysts and businesses who watch tanker voyages, Iran’s oil production and exports increased in August despite US sanctions as Tehran sold to customers like China.
Iran’s oil output exports rise: According to analysts, the increased shipments seem to be a combination of Iran’s skill in avoiding US sanctions and Washington’s latitude in applying them as the two nations work to improve their relations.
Since Donald Trump pulled out of a 2015 nuclear agreement in 2018 and re-imposed sanctions aimed at reducing revenues to the Iranian government, the United States has moved to restrict Iran’s oil exports. However, exports have increased under President Joe Biden, with China being the largest consumer, according to industry trackers.
According to a consultant named SVB International, Iran’s oil output surged in August to 3.15 million barrels per day (bpd), the highest level since 2018, while the country exported slightly under 2 million bpd of crude oil and condensate.
“Iran is on the path to recover its pre-sanctions oil production,” said Sara Vakhshouri of SVB.
Similar estimations were provided by three other trackers that Reuters contacted.
“US-Iran Negotiations, Potential Deal, and Political Considerations Amidst Rising Oil Prices”
The US and Iran are negotiating a possible deal under which Iran would free five US people in exchange for the US releasing $6 billion in blocked Iranian assets in South Korea. Jake Sullivan, the national security adviser for the White House, has refrained from providing a timetable for a settlement.
As the elections in November 2024 get closer, Biden also faces a political risk from rising oil prices. Increasing supply could help to keep costs low on the worldwide market.
According to Kevin Book, an analyst at ClearView Energy Partners, the US sanctions’ “enforcement discretion” is “appearing.”
According to a representative for the US State Department, the government is still enforcing sanctions on Iran, and data on oil exports varies over time and according to methodology.
The official stated, “We also constantly contact with other nations to strongly discourage them from adopting actions that infringe sanctions on Iran.
An inquiry for comments was not immediately answered by the Treasury Department.
THE HARD TO STOP
Iran has long used strategies like ship-to-ship transfers and “spoofing”—manipulating GPS transponders so that ships appear in different locations—to avoid oil sanctions, and the nation is only getting more adept at doing so, observers said.
According to Ben Cahill, an analyst at the research tank Centre for Strategic and International Studies, Iran has also significantly discounted its oil supplies to China, which has encouraged consumers to increase their purchases.
“It comes as no surprise because discounting oil increases demand for it. I also believe it’s difficult to put a halt to this trade,” he added.
According to analysts and shipping data, Iranian oil also travels to Syria and Venezuela.
The Organisation of the Petroleum Exporting Countries (OPEC), of which Iran is a member, reported that a production rate of 3.15 million bpd would be the highest for Iran since 2018.
“Iran’s August Crude and Condensate Exports Reach New Heights, Predictions of Rising Production Ahead”
According to data given to Reuters by the oil shipments assessment website TankerTrackers.com, Iran’s crude and condensate exports averaged 1.92 million bpd in the first 27 days of August, of which the crude share was 1.77 million bpd.
According to the data provided by the firm, oil exports in August would have been the highest monthly rate this year.
Crude exports in August exceeded 1.5 million bpd, according to a different tanker-tracking company that refuses to be named.
Crude exports are expected to average around 1.2 million bpd in August, down from a 2018 record of 1.54 million bpd reached in May, according to Kpler, a source of flows data. The corporation frequently updates its financial data. Iranian exports are not subject to any government statistics. Companies that follow tankers keep an eye on flows using information from satellites and port loading.
Iran has stated that it anticipates a rise in supply soon. According to official media, Iran’s oil minister, crude production will exceed 3.4 million bpd by the end of September.