Platts– Iran’s crude and condensate exports rose slightly in August as lower deliveries from key competitors like Saudi Arabia and Iraq meant there was more demand for crude from some of Iran’s main buyers.
- Demand for Iran’s oil from India falters
- Aug exports rise 2.5% to 2.42 million b/d
- Iranian oil finds healthy spot demand in August
Total estimated export volume on Aframaxes, Suezmaxes and VLCCs from Iranian ports in August rose almost 2.5% to 2.42 million b/d from 2.37 million b/d in July, according to data from Platts trade flow software cFlow.
Exports to Asia fell to 1.46 million b/d in August from 1.55 million b/d in July, with demand from key customer India down sharply, although flows to China continued to rise.
Europe’s share of Iranian exports grew sharply, with demand from Italy, France, the Netherlands and Greece all up, while Turkey remained a key buyer too.
Sources and analysts noted that Iranian oil exports last month rose as demand for its crude, especially in China and Europe, climbed, supported by favorable economics.
Moves by Saudi Arabia and Iraq to further reduce their exports in August, both to meet domestic demand and also as part of OPEC’s coordinated output cuts, bode well for Iran.
The reductions have created a gap for Iran to fill, while state-owned NIOC has also reduced prices for some if its heavy crude grades, making them more economically viable for refiners and pushing up spot demand.
Sources added that Iran’s additional exports came from its onshore storage, not necessarily only from additional production.
FLOWS TO CHINA, EUROPE CLIMB
Exports to Iran’s largest customer, China, were up slightly to 693,419 b/d in August from 638,322 b/d, the highest volume Iran has exported to China this year, according to Platts data.
Chinese consumption has increased this summer on healthy spot demand, buoyed by growing interest from both Chinese state-owned and independent refiners. Chinese companies have seen cuts in their term contract volumes from Saudi Aramco in the past few months, pushing up demand for Iranian crude, which is of a similar quality.
At the same time, Indian demand for Iranian crude has slowed this summer, particularly from state-owned refiners, after the two countries faced a standoff over the development of Iran’s Farzad B gas field.
Exports to India fell by 167,258 b/d month on month to 264,742 b/d in August. The key buyers of Iranian crude in India were again Essar Oil and Mangalore Refinery and Petrochemicals Limited (MRPL).
As a result of lower flows to India, South Korea has now emerged as the second-biggest buyer of Iranian oil in August, taking 284,742 b/d.
In neighboring Japan, flows from Iran continued their downward trend, falling by 43,162 b/d on the month.
Meanwhile, Iranian oil flows to Europe rebounded sharply in August, with 835,742 b/d sailing to the region, a rise of almost 200,000 b/d month on month.
Turkey remains the region’s largest buyer of Iranian crude, with 256,258 b/d exported last month.
Exports to Italy, France, the Netherlands and Greece were all up month on month, demonstrating the price competitiveness of Iranian crude against other regional sour grades, like Russia’s Urals, Iraq’s Basrah Light and Saudi Arabia’s Arab Heavy.
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Iran’s oil production has also continued to rise in the past few months and is now above its OPEC quota of 3.797 million b/d.
According to a recent Platts OPEC survey, Iranian crude oil production was at 3.83 million b/d in August, up 10,000 b/d from July.
The country’s oil minister Bijan Zanganeh also confirmed earlier this week that production was more than 3.8 million b/d.
“We hope to increase oil production capacity in the coming months. We can do that with [development] of the West Karun [oil fields] and also South Pars gas condensates,” he said.
The West Karun oil region is home to Iran’s shared oil fields with Iraq, including Azadegan, Yadavaran and Yaran. The area’s oil production has reached 280,000 b/d, Zanganeh added.
The country also intends to issue foreign bonds as part of plans to pursue projects in its investment and technology-hungry energy sector, Zanganeh said.