Iranian oil exports towards the Asian and EU markets averaged at 2.6Mbbl/d throughout the past 1396 year, in the Solar Hijri calendar (20th March 2017-20th March 2018). This level, representing some 2.155Mbbl/d of crude and 428,000bbl/d of condensate, slightly exceeds the 2.5Mbbl/d of average exports during the pre-sanctions era, up to 2012. Within the first six months from the lifting of the most nuclear-related economic and financial sanctions by the US, the EU and the UN, Iran restored oil exports at 2Mbbl/d and concluded crude sale contracts with European companies, like the Spanish Repsol, the Italian Saras and Iplom and the Greek Hellenic Petroleum. Up until the final month of the Persian year 1395, which ended on 21st March 2017, Iranian oi exports had reached 3.05Mbbl/d. As a result, the founding member of OPEC (along with Iraq, Kuwait, Saudi Arabia and Venezuela) ended up being regularly scolded by the Organization for its failure to adhere to promised production cuts under a 2016 deal to curb a global oil glut. In the precedent fiscal year, around 60% of crude exports were delivered to Asian oil refining plants, while the remaining 40% were purchased by European customers, the biggest of whom being France’s Total and Italy’s Eni and Saras. Out of the Asian countries, India and China imported most of the crude, while South Korea received the largest volumes of condensate.
The 2.6Mbbl/d average, although noteworthy from the perspective of Iran’s rapid rebound of exports at over pre-sanctions figures, still appears incompatible with the agreed OPEC cap for the rebalancing of the oil market, mainly due to the sharp rise in the country’s domestic oil output over the last months (up by 165,000bbl/d between April 2017 and January 2018). But amidst speculation that the current US administration might withdraw from the nuclear pact, especially in the aftermath of appointments of John Bolton as the top national security adviser and Mike Pompeo as Secretary of State, these export quantities are subject to change. Potential resumption of US-imposed sanctions against Tehran could bring about a decrease in Iranian exports by 250,000-500,000bbl/d by the end of 2018, as well as an upward trend in oil prices driven by geopolitical instability, in combination with fears of an imminent trade war with China.
In a separate development, Iran’s President Hassan Rouhani stated on March 20 that the country is poised to achieve natural gas self-sufficiency in 2018. As the gas output at the giant Persian Gulf field has nearly doubled over the previous four years (from 285 to 555MCM), Iran will not need to purchase gas from any other external supplier this year. Furthermore, the National Iranian Gas Transmission Company (NIGTC) announced that last year 182BCM of natural gas were injected into the national network, which was extended following completion of IGAT-6. This sixth trunk line of the Iranian gas grid will be able to carry 110MCM/d of natural gas from the South Pars to the southern and western parts of the country (up to the provinces of Hamadan and Kermanshah). At the same time, another bunch of pipelines, such as the Damghan-Neka line, is used for the transport of natural gas from the South Pars all the way to Iran’s North, previously heavily dependent on Turkmen gas imports due to its poor interconnection to the gas-abundant southern regions. The two neighboring states have been since early 2017 involved in a dispute that resulted in Turkmenistan halting gas exports to Iran due to the latter’s unpaid debt.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-march-28-2018/#3