Iran oil exports drop, stay above Western limits

July 02, 2014 - 12:00:00 am

LONDON: Iran’s crude oil exports dropped in June after a spike in May, yet sales were still above the level allowed by an interim deal aimed at curbing Tehran’s nuclear programme, according to sources who track tanker movements.

Under the agreement signed in November between Iran and six world powers, which came into effect in January, Iran’s exports should average one million barrels per day (bpd) through to July 20.

Iran’s oil exports slipped to 1.21 million bpd in June, from 1.33 million bpd in May, one of the sources said. “Total exports are about 10 percent down month-on-month as China and India have taken less,” the source said.

“Exports in June to Japan and Turkey have been firm and South Korea has taken more, making up for lower sales to that destination in May.” A second source said Iranian crude exports fell by 100,000bpd to almost 1.2 million bpd in June from May’s high levels.

China, Tehran’s largest oil client, has since late 2013 been stepping up purchases from the Opec country. China’s Iranian crude oil imports expanded 36 percent in May, or 757,900bpd, from a year ago to the second highest on record, customs data showed last week.

Though higher exports since late 2013 have bolstered Iran’s coffers, officials in US President Barack Obama’s administration have said they expect Iran’s oil sales to average “approximately” 1 million bpd over the entire six-month period under the agreed deal, which expires on July 20 but can be extended for up to six months.

“Iran is increasingly emboldened to export its oil,” said Mark Dubowitz of US-based independent think-tank Foundation for Defence of Democracies (FDD).

“The Obama administration already has sent the message that it won’t crack down on Iran’s excess crude oil sales, condensates exports, or its transfer of crude oil to (Syrian President Bashar Al) Assad despite congressional demands,” he added.

The US administration has argued that condensates do not count as crude oil; that Iranian gifts of oil to Syria are not “sales” and so also do not count; and that Iran is allowed to sell between 1 million and 1.1 million bpd under the deal.