At the biggest oil market in the world, crude from Iran is back in vogue.
The Persian Gulf state boosted exports to major oil consumers in Asia during the first half of this year, after international sanctions that restricted its supplies were eased in January. Japan’s purchases increased 28 percent, India bought 63 percent more, South Korea’s imports more than doubled while shipments into China gained 2.5 percent during the six months, government and shipping data compiled by Bloomberg show.
The increase in cargoes to Asia shows Iran is having some success in meeting its pledge to prioritize regaining market share it lost in the region due to the sanctions over its nuclear program. The nation, which was OPEC’s second-biggest producer before the international measure choked off its supplies, defied skeptics with a 25 percent surge in production so far in 2016 and aims to reach an eight-year high for daily output of 4 million barrels by the end of the year.
“Iran appears to have had a strategy to target emerging markets in Asia to increase market share as well as to recover its production to levels before sanctions were imposed,” Kang Yoo Jin, a Seoul-based commodities analyst at NH Investment & Securities Co., said by phone. “For it to continue to secure and expand market share, it will need to not only strengthen relations with old customers but also regions that see growth. It will be continuously challenged by increased competition from countries including Saudi Arabia and Russia.”
Iran is exporting about 2 million barrels of its daily output of 3.8 million, Mohsen Ghamsari, director of international affairs at state-run National Iranian Oil Co., said earlier this month. It has regained about 80 percent of the market share it held before the U.S. and European Union tightened sanctions on its oil industry in 2012, he said.
Japan, which is predicted by the International Energy Agency to be the third-largest oil consumer in Asia this year, bought almost 206,000 barrels a day of crude from Iran during the first six months of the year, according to data from the North Asian nation’s Ministry of Finance. Daily imports in June more than doubled to about 339,000 barrels, data released on Thursday show.
India, forecast by the IEA to be the second-biggest oil consumer, boosted purchases from Iran to about 338,000 barrels a day during January to June from almost 207,000 barrels in the same period a year earlier, according to shipping data obtained by Bloomberg. Shipments to South Korea, the fourth-largest user in the region, jumped 123 percent to about 265,000 barrels a day, data from Korea National Oil Corp. show. Top Asian consumer China bought 603,000 barrels daily.