Iran Oil Exports in April Surge Ahead of Possible US Sanctions: Report
TEHRAN (Tasnim) – Refinery maintenance coupled with a release of floating storage volumes pushed Iran's crude and condensate exports in April to multi-year highs, although output remained stable, a report said.
This massive surge in exports comes ahead of the May 12 deadline for the US president to decide on whether to withdraw from the Iran nuclear deal and impose sanctions on the country.
Sources have also said the rise in exports last month could be a way for Iran to prepare itself for a more challenging environment amid the growing likelihood that US sanctions could restrict the country's crude flows.
Demand for Iranian crude in China and India is likely to remain very strong even if sanctions are imposed, though refiners in Europe, South Korea and Japan are likely to tread more carefully.
Total estimated export volume on Aframaxes, Suezmaxes and VLCCs from Iranian ports in April rose 16% to 2.70 million b/d from 2.32 million b/d in March, according to data from S&P Global Platts trade flow software cFlow on Monday.
The sharp rise in exports is attributed to refinery turnaround work at the Abadan refinery along with floating storage volumes being exported to some of Iran's key customers.
Of this, crude exports were around 2.45 million b/d, a rise of some 400,000 b/d from March, though condensate exports remained largely steady month-on-month.
Exports to Asia rose significantly to 1.81 million b/d in April from 1.40 million b/d in March, accounting for 67% of total monthly exports, up from 60% in March.
The Asian gain was led by a rise flows to India, up by almost 60% to 670,500 b/d.
Indian demand for Iranian crude is rising steeply as both Indian state-owned and private refiners are buying more due to Iran offering the country some freight discounts.
India's oil ministry has indicated that its imports of Iranian crude for the fiscal year 2018-19 will rise by more than 30% from the previous year.
China remained the largest export destination for Iranian oil, with flows rising to 714,467 b/d in April, up just over 20,000 b/d from March.
Even demand from Japan, which has fallen sharply in the past year, rose from no volumes in March to 118,900 b/d in April.
Flows to South Korea and Japan, which mainly consist of condensates, have declined in the past few months, as Iran has been consuming more volumes domestically at its Persian Gulf Star refinery.
Flows to Europe in April fell to 716,732 b/d from 761,418 b/d, as interest from Turkey, Italy, Spain was slightly lower.
European refiners, however, said that Iranian crude remains very competitively priced against sour grades from Iraq, Russia and Saudi Arabia.
But with expectations of US sanctions, some refiners have been starting to buy more Iraqi and Saudi barrels for June in case Iran's exports are immediately impacted.
