Iranian oil shipments advanced 13 percent last month even as the U.S. implemented sanctions complicating sales from the Persian Gulf country, according to the International Energy Agency.
Countries purchased 1.28 million barrels a day from Iran in February, compared with an upwardly revised 1.13 million barrels daily in January, the Paris-based adviser to 28 oil-consuming nations said in a report today. New U.S. rules requiring importers to pay in local currencies kept in escrow accounts did not appear to affect February shipments, the agency said.
The U.S. and allies are restricting Iran’s oil exports, the country’s largest source of revenue, to pressure the government in Tehran to stop enriching uranium. Negotiators will meet in Kazakhstan next month to discuss steps toward an agreement on Iran’s nuclear program, which the country says is for civilian use while Western governments suspect a military intent.
“The only thing clear is that the current stalemate between Iran and the West is unsustainable,” the IEA said in the report. “Sooner or later, something has to give.”
Iranian exports are still down from a daily average of 1.5 million a day last year and 2.5 million in 2011, before sanctions intensified, IEA estimates show. The country’s output, once the second-highest in the Organization of Petroleum Exporting Countries, also expanded last month, rising 2.6 percent to 2.72 million barrels a day, compared with 3 million barrels a day in 2012, according to the IEA.
Iran bought secondhand tankers from “foreign middlemen” to ship oil to China, the IEA said, citing industry reports. The country is also ordering vessels to turn off their transponders, complicating the compilation of exports data, according to the agency.
The shipments estimates are based on import data submitted by nations in the Organization for Economic Cooperation and Development, information from customs agencies, and news reports for individual countries, the IEA said. Tanker-tracking is the only source of information for the most current month, according to the report.
Exports will average 1.38 million barrels a day in the Iranian fiscal year starting March 21, 2013, the IEA estimates. That’s in line with the government’s budget expecting 1.3 million barrels a day, according to the report. Oil sales once accounted for half of government revenue, according to the U.S. Department of Energy.
The U.S. sanctions that took effect in February block Iran from repatriating oil payments, effectively forcing Iran to use the money to buy goods in the importing country, the IEA said. Countries that violate the rules risk being banned from the U.S. financial system, according to the report.
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