Iran’s oil exports jumped by 30 percent from last year to 870,000 barrels per day (bpd) in the first quarter of 2022, The Wall Street Journal reported on Thursday, citing data from commodity data provider Kpler, as the main Iranian crude buyer, China, is cutting back on imports of Russian oil.
The jump in Iran’s oil exports in Q1 was the fastest among all producers in the Middle East, while the volume of exports is estimated to be the highest since former U.S. President Donald Trump withdrew from the so-called Iranian nuclear deal in 2018, Kpler says, as carried by the Journal.
The Russian invasion of Ukraine has upended global oil trade flows and has emboldened Iran to boost its exports—despite the fact that it is still under U.S. sanctions with no imminent nuclear deal in sight—to its key customer, China. The world’s top crude oil importer China, for its part, has not rushed to buy cheap Russian oil.
Iran sells its crude oil almost exclusively to China and has never stopped those sales since former President Trump re-imposed the sanctions against Tehran in 2018. Currently, China is also emboldened to import more Iranian crude, not expecting to be hit by secondary sanctions by the U.S. for dealing with Iran “because Washington has its plate full with Russia,” a Kpler analyst told the Journal.
During the Iranian year that ended on March 20, 2022, Iran’s oil exports rose by over 40 percent, Iran’s Minister of Petroleum Javad Owji said earlier this month, as carried by the oil ministry’s news service Shana.
“He further said that the Iranian Ministry of Petroleum would never disclose the methods and destinations of its oil exports,” the agency reported in early April.
Meanwhile, Chinese refiners are not rushing to purchase heavily discounted Russian crude on the spot market, avoiding being singled out as buyers of Moscow’s oil amid tightening Western sanctions on Russia. China, which has grown increasingly closer ties with Russia in the energy sector of late, has not officially condemned Vladimir Putin’s war in Ukraine, but its government has recently appeared cautious about new spot deals. China hasn’t yet shown too much appetite for Russian crude because of several factors, according to energy consultancy Wood Mackenzie. These include expensive freight for Russian cargoes due to the sanctions, challenges with payments and tanker insurance, the fact that a Urals voyage takes double the time compared to Middle Eastern grades going to China, and Chinese refiners’ long-term contracts with oil exporters from the Middle East.
By Tsvetana Paraskova for Oilprice.com