Iranian oil exports have hit new highs in the final two months of 2022 and are off to a strong start to 2023 despite U.S. sanctions, according to companies that track flows, on higher shipments to China and Venezuela.
Tehran’s oil exports have been limited since former US President Donald Trump in 2018 withdrew from the 2015 nuclear deal and reimposed sanctions aimed at curbing oil exports and the Iranian government. The associated revenues were to be withheld.
Exports have risen under his successor, President Joe Biden, who sought to revive the nuclear deal, and are by some estimates the highest since 2019. This comes despite a stall in these negotiations and competition from discounted Russian crude.
Energy consultant SVB International said Iran’s crude oil exports averaged 1.137 million barrels per day in December, up 42,000 bpd from November and the highest figure for 2022 based on SVB’s earlier estimates.
“Compared to the Trump administration, there have been no serious crackdowns or actions against Iran’s oil exports,” said SVB’s Sarah Vakhshuri. “January exports were as strong as previous months so far.”
“Lower Chinese demand and Russia’s supply to China have been a major challenge for them. Most of its oil still goes to the Far East, ultimately to China. Iran also helps Venezuela export oil.
Adrienne Watson, a spokeswoman for the National Security Council at the White House, said the administration’s enforcement of sanctions is strong, and “Iran’s economic data clearly confirms that.”
“We will not hesitate to take action against Iran’s missile and drone trade and human rights abuses against the Iranian people, as well as those who evade sanctions,” Watson said. The Treasury Department imposed sanctions late last year on an oil smuggling ring linked to Iran’s Islamic Revolutionary Guard Corps (IRGC).
Oil supply-tracking consultant PetroLogistics said it also sees an upward trend in Iranian crude exports, which it believes reached their highest level since March 2019 in December.
Kpler, a data intelligence firm, put Iranian crude exports at 1.23 million bpd in November, the highest since August 2022 and roughly equal to April 2019’s rate of 1.27 million bpd, although they were only 1.1 million bpd in December. fell below million bpd.
Iran’s oil ministry did not respond to a request for comment on the exports. The semi-official Fars news agency reported this week that Iran’s draft state budget is based on deliveries of more than 1.4 million bpd.
China is Iran’s biggest customer. To avoid sanctions, most of Iran’s crude exports to China are rebranded as crude oil from other countries, according to analysts including FGE. Iran has said in the past that documents were forged to hide the origin of Iranian cargo.
In addition, Iran expanded its role in Venezuela last year, even under U.S. sanctions, sending light oil supplies for refining and producing export crude grades.
More for China
There are no definitive figures for Iranian oil exports and estimates often fall into a wide range. Tanker tracking companies use a variety of methods to track flows, including satellite data, port loading data and human intelligence. Iran does not usually release data.
According to another analyst, Vortexa, China’s December imports of Iranian oil hit a new record of 1.2 million bpd, up 130 percent from a year earlier.
“Most of these shipments were homed in Shandong, where independent refiners have turned to discount grades amid sluggish domestic demand and depressed refining margins from the second half of 2022,” the company said.
China’s foreign ministry’s press department said in response to a request for comment: “Legitimate and reasonable cooperation between China and Iran under the international legal framework deserves respect and protection,” Reuters on China’s record purchases of Iranian oil. without directly addressing the question of .
Vortexa said supplies of Russian Urals, the main competing grade for Iranian oil, fell in December – when a price cap on Russian crude exports and an EU ban created uncertainty for buyers.
A renewed nuclear deal would allow Iran to increase sales to former buyers such as South Korea and Europe.
Still, talks have stalled since September, and Washington’s special envoy for Iran said in November that Tehran’s crackdown on anti-government protesters and drone sales to Russia had diverted Washington’s attention from the deal.
Iran’s crude exports fell from 2.5 million bpd in 2020 to 100,000 bpd in 2018 after Trump pulled the U.S. out of the nuclear deal and reimposed sanctions, according to TankerTrackers.