Iran ramps up oil exports to China
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Iranian exports' increase was the fastest of any Middle Eastern country and the greatest since President Trump resumed the oil embargo following his withdrawal from the 2015 nuclear accord.
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Iran ramps up oil exports as China pulls back on Russian crude.
Iran is increasing its oil exports and benefiting from rising oil prices while its largest importer, China, reduces its imports of Russian oil due to the war in Ukraine.
Iran's oil exports surged to 870,000 barrels per day in the first three months of the year, up 30% from an average of 668,000 barrels per day in the full year 2021, according to commodities data provider Kpler. According to figures from the Chinese customs office, China reduced its purchases of Russian oil by 14% in March.
Iran's increasing exports show how the war in Ukraine is redrawing the world's energy trade lines, as energy customers seek alternatives to Russian oil and gas to avoid Western sanctions. The changes are projected to accelerate as more Russian oil exits the market, with the International Energy Agency forecasting that Russian output will plummet by more than a quarter.
'Faster exporter in the MENA region'
Iran's exports increased faster than those of any other Middle Eastern country in the first quarter, reaching the highest level since President Trump reimposed sanctions on Tehran in 2018 after withdrawing from a 2015 nuclear agreement struck by President Obama, according to Kpler.
Russia and Iran have several points in common, including the support for President Bashar Al-Assad in Syria in the face of the US-led global hegemony. But when it comes to oil, they are competitors, as some of Iran’s crude shares an analogous composition to Russian grades that makes substituting them for one another by refineries relatively easy.
Iran is currently supplying more oil to China, despite charging higher prices than Moscow, after oil prices reached a decade high following Russia's military operation in Ukraine.
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According to an Iranian official, Moscow sells its oil at a $30 per barrel discount to international pricing, while Iran offers lower refunds of $20 per barrel.
Iran's oil exports increased by 40% in the fiscal year ending March 20, according to Jawad Owji, the country's oil minister, who spoke to state media earlier this month. As a result, the government received around 10% more in oil money than it had anticipated, according to Owji.
The potential to export additional oil comes at a particularly advantageous time for Iran. It had been planning to raise its oil output in anticipation of a nuclear agreement with the US, which would have included lifting the embargo on Iranian oil. The talks to resurrect the accord have stagnated.
'Iran to sell more oil'
In recent months, Iran launched testing drills to restart onshore wells that were idle for years because of the sanctions, Iranian officials say. “We are going to be ready to sell more oil,” said an Iranian official. The aim was to substantially increase production to be able to export an additional 1 million barrels of oil a day as soon as the deal became effective, the official said.
According to these sources, Iran also sent ships carrying millions of barrels of oil for interim storage before being snatched up by purchasers. Data from maritime tracker MarineTraffic shows the locations of the idling tankers, which include a northern Chinese port near South Korea, which has stated that if sanctions are relaxed, it will resume Iran oil sales.
However, oil exports from Russia—the world's largest oil and gas exporter—have been under pressure since then, with many consumers avoiding its products and others, such as the United States, explicitly prohibiting them.
