LONDON/SINGAPORE, Aug 17 (Globe Live Media) – Iran boosted its oil exports in June and July and could raise them further this month by offering a bigger discount to Russian crude for its main buyer China, companies that track the flows said.
Despite US sanctions, Iran has boosted its oil exports, much of it to China, under US President Joe Biden, but shipments have slowed recently due to competition from Russian crude.
“Iran has been exporting more under the new US government: oil, petrochemical products and goods,” said Sara Vakhshouri of energy consultancy SVB International.
And while high oil prices have reduced pressure on Tehran to reach a nuclear deal, if talks to resurrect one are successful, it would allow Iran to increase sales beyond China to former buyers in South Korea and Europe.
Iran’s Oil Ministry did not respond to a request for comment.
Chinese crude imports could rebound in August as the attractiveness of Russian oil prices fades, offset by falling demand in Europe amid concerns over sanctions over Russia’s invasion of Ukraine, added Emma Li, an analyst at Vortex Analytics.
“Iranian crude was facing strong competition with Russian Ural crude in July as non-sanctioned barrels were offered at similar discount levels. However, as the price gap between the two widens, refiners may China will turn to cheaper Iranian barrels again in August,” Li said.
By importing Russian and Iranian crude at deep discounts, China boosts its economy’s competitiveness vis-à-vis the West, which pays much higher prices for alternative crude grades from the Middle East, Africa and the United States.
China’s Foreign Ministry said, in response to a Reuters query, that while it does not know the details of oil flows from Iran, Beijing has long opposed Washington’s sanctions.
“China maintains normal trade with both Iran and Russia in various fields including oil. These legitimate cooperations deserve to be respected and safeguarded,” a spokesman said.
Former US President Donald Trump withdrew from Iran’s nuclear deal with world powers in 2018 and reimposed sanctions on the country, seeking maximum pressure on its oil exports and revenues.
Iranian exports later fell back to as little as 100,000 bpd at some points in 2020, tanker-tracking companies said.