March 28, 2020
Data received by Radio Farda show that since January Iran’s crude oil exports to China have dropped further to less than 220,000 barrels per day.
Earlier, Washington had repeatedly insisted that one of its main goals in imposing economic sanctions on the Islamic Republic was pushing Iranian oil exports to zero.
The United States and China signed an agreement in January to pause their trade war. In the meantime, Washington asked Beijing to stop importing crude oil from Iran altogether.
The Trump administration announced in May 2019 it would no longer grant sanctions waivers to any country to buy oil from Iran. The move was expected to wipe roughly one million barrels per day (bpd) off the market.
However, following Washington’s decision to end its waivers, China remained as the sole importer of Iranian oil, although significantly less than in the past.
But the fact was Iran was not receiving much cash for the oil. China Petroleum & Chemical Corporation (Sinopec Group) and China National Petroleum Corp (CNPC), the country’s top state-owned refiners, are receiving the bulk of the 140,000 to 170,000 bpd of oil in return for their prior $5-billion investment in Iran’s Yadavaran and Azadegan oil fields.
Nonetheless, until February 2020, China’s oil imports from Iran were more than the amount related to China’s investment in Iranian oilfields. The assumption was that Iran was also storing some oil in China.
In the meantime, Kpler, an international data intelligence company that “provides transparency solutions to commodity markets”, told Radio Farda that the volume of crude oil loaded in March in Iran has dropped to 160,000 bpd.
The volume was 248,000 and 254,000 bpd in February and January, respectively.
Therefore, counting in Tehran’s debt to the Chinese investors in the Yadavaran and Azadegan oil fields, it appears that the amount of Iranian crude export revenues for the first time has dropped to zero.
Kpler’s data show that, on average, Iran managed to export nearly 570,000 bpd in the last fiscal Iranian year, (ended on March 20) and the bulk was destined for China.
Immediately after Washington stopped offering exemption in May 2019 to a handful of countries to buy oil from Iran, its exports quickly dropped from nearly 1.5 million bpd to under 500,000 bpd, and almost 220,000 bpd in the past three months in average.
While Iran oil tanker operation (loading) has dropped to 160,000 bpd in March, Iran’s new fiscal budget (beginning March 20) has projected selling one million bpd of crude at $50 per barrel. But even if Iran can smuggle out some oil, prices have halved in recent weeks, due to the coronavirus pandemic.
The Islamic Republic had expected to collect $18.25 billion through exporting crude in the current Iranian calendar year (March 20, 2020-21). With the current oil glut and extremely low prices, Iran has little chance of getting more than a fraction of its projected oil income.
Before the U.S. sanctions, the Islamic Republic used to produce 3.82 million bpd, while its oil and gas condensate exports amounted to 2.5 million bpd.
OPEC’s data also show that Iranian oil production in recent months has dropped to below 2.1 million bpd. Therefore, as Iran locally consumes 1.8 million bpd, it only has 300,000 bpd of extra crude for export.
Radio Farda’s data provided by Kpler show that Iran has currently stored more than 100 million barrels of crude, 61.9 million barrels in onshore facilities, and the rest loaded on oil tankers docked at the Persian Gulf.