Turkey and Italy are the last buyers of Iranian crude outside China, India and the Middle East, according to tanker data and an industry source, the latest sign that shipments are taking a major hit from looming U.S. sanctions.
The Islamic Republic has exported 1.33 million barrels per day (MMbbl/d) so far in October to India, China, Turkey and the Middle East, according to Refinitiv Eikon data. No vessels are shown heading to Europe with Iranian crude.
However, an industry source who also tracks the exports estimated shipments at 1.5 MMbbl/d, including vessels which are not showing on AIS satellite tracking, of which a 1 million-barrel tanker is going to Italy.
That's down from at least 2.5 MMbbl/d in April, before President Donald Trump in May withdrew the United States from a 2015 nuclear deal with Iran and reimposed sanctions. The figures also mark a further fall from 1.6 MMbbl/d in September.
The expected loss of a sizeable amount of Iranian supply has helped drive a rally in oil prices, which on Oct. 3 hit their highest since late 2014 at $86.74 a bbl. Crude has since eased to $81 although analysts say the Iranian export drop remains supportive.
“It’s one of the reasons why prices are still above $80,” said Eugen Weinberg, analyst at Commerzbank.
The October figures add to signs that buyers are sufficiently wary of the U.S. sanctions to stop or scale back their Iranian crude dealings, and that exports are falling more steeply than some in the market expected.
For sure, definitive export data is hard to uncover. Tanker schedules are often adjusted, exports vary week by week and the tracking of tankers, while easier than in the past due to satellite information, remains both art and science.
In the first week of October, Iran’s crude exports averaged 1.1 MMbbl/d according to Refinitiv and less than 1 MMbbl/d according to another industry source.
While Washington has said it wants to cut Iran’s oil exports to zero, Iran and Saudi Arabia say that is unlikely to happen. The Trump administration is considering waivers on sanctions for countries that are reducing their imports.
India, a major buyer, has ordered Iranian oil for November.
Iran, which has pledged to block any OPEC supply increase that the country deems to be against its interests, says it has found new buyers for its oil and its crude output has fallen only slightly.
For September, Iran told OPEC its crude output dropped by 50,000 bbl/d to 3.76 MMbbl/d, while consultants and government agencies that OPEC uses to monitor production reported a larger fall to 3.45 MMbbl/d.
Indeed, Iran may not yet have cut production to match the rate of decline in its exports, as the country appears to be storing more oil on ships, as it did during sanctions that applied until the 2015 nuclear deal.
Recommended Reading
Report: Crescent Midstream Exploring $1.3B Sale
2024-04-23 - Sources say another company is considering $1.3B acquisition for Crescent Midstream’s facilities and pipelines focused on Louisiana and the Gulf of Mexico.
For Sale? Trans Mountain Pipeline Tentatively on the Market
2024-04-22 - Politics and tariffs may delay ownership transfer of the Trans Mountain Pipeline, which the Canadian government spent CA$34 billion to build.
Energy Transfer Announces Cash Distribution on Series I Units
2024-04-22 - Energy Transfer’s distribution will be payable May 15 to Series I unitholders of record by May 1.
Balticconnector Gas Pipeline Back in Operation After Damage
2024-04-22 - The Balticconnector subsea gas link between Estonia and Finland was severely damaged in October, hurting energy security and raising alarm bells in the wider region.
Wayangankar: Golden Era for US Natural Gas Storage – Version 2.0
2024-04-19 - While the current resurgence in gas storage is reminiscent of the 2000s —an era that saw ~400 Bcf of storage capacity additions — the market drivers providing the tailwinds today are drastically different from that cycle.