Iranian oil exports end 2022 at new highs despite US sanctions

Oil exports from Iran hit a new high in the last two months of 2022 on higher shipments to China and Venezuela, and are on track for a solid start to 2023 despite US sanctions, according to a firm that tracks the flow.

Tehran’s oil exports have been limited since former US President Donald Trump in 2018 withdrew from the 2015 nuclear deal and reimposed sanctions to block oil exports and related revenues to the Iranian government.

Exports have risen during the term of Trump’s successor Joe Biden, who has sought to revive the nuclear deal, and hit the highest since 2019 in some estimates. This comes despite headwinds such as stalls in those talks and competitions from the raw Russian pieces.

Energy consultant SVB International said Iran’s crude exports in December averaged 1.137 million barrels per day (bpd), up 42,000 bpd from November. However, the highest figure of 2022 SVB is reported based on the estimate given earlier.

“Compared to the Trump administration, there has been no serious action or action against Iran’s oil exports,” said Sara Vakhshouri of SVB. “January exports came in as strong as the previous month.”

“Decreasing Chinese demand and Russian supply to China has become a major challenge for them. Most of their oil still goes to the Far East, ultimately to China. Iran also helps Venezuela export its oil.

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Adrienne Watson, spokeswoman for the National Security Council at the White House, said the administration’s enforcement of the sanctions was strong, and “Iran’s macroeconomic figures bear this out.”

“We have not and will not hesitate to take action against sanctions abusers, with sanctions against Iran’s missile and drone trade, and human rights violations against the Iranian people,” Watson said. The Treasury Department imposed sanctions late last year on an oil smuggling ring linked to Iran’s Islamic Revolutionary Guard Corps (IRGC).

Consultant Petro-Logistics, which tracks oil supplies, said it also saw an upward trend in Iran’s crude oil exports which, in its view, in December reached the highest level since March 2019.

Kpler, a data intelligence firm, put Iran’s crude oil exports at 1.23 million bpd in November, the highest since August 2022 and nearly the same as April 2019’s level of 1.27 million bpd. However, they fell below 1 million bpd in December.

Iran’s Oil Ministry did not respond to a request for comment on exports. However, Iran’s state budget draft is based on higher shipments of 1.4 million bpd, the semi-official Fars news agency reported this week.

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China is Iran’s biggest customer. To avoid sanctions, most of Iran’s crude oil exports to China are rebranded as natural from other countries, according to analysts, including FGE. In addition, Iran in the past has said that the documents were forged to hide the origin of Iranian cargo.

Also, Iran last year expanded its role in Venezuela, also under US sanctions, sending light oil supplies for refining and diluents to produce exportable crude grades.

More to China

There are no definitive figures for Iran’s oil exports, and estimates often vary. Tank tracking companies use a variety of methods to track flows, including satellite data, port load data and human intelligence. However, Iran generally does not release numbers.

According to another analyst, Vortexa, China’s December Iranian oil imports hit a new record of 1.2 million bpd, up 130% from a year earlier.

“Most of these shipments have found a home in Shandong, where independent refining has been discounted from the second half of 2022 amid weak domestic demand and depressed refining margins,” the company said.

In response to a request for comment, the press department of the Ministry of Foreign Affairs of China said: “The legal and reasonable cooperation between China and Iran within the framework of international law deserves respect and protection,” without directly addressing Reuters’ query on China’s records of Iranian oil purchases.

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Vortexa said supplies of Russia’s Urals, a major competitor for Iranian oil, fell in December – as Russia’s crude export price cap and European Union bans created uncertainty for buyers.

A revived nuclear deal will allow Iran to boost sales to former buyers like South Korea and Europe.

Still, talks have been deadlocked since September. Washington’s special envoy for Iran said in November that Tehran’s crackdown on anti-government protesters and drone sales to Russia had shifted Washington’s focus away from the deal.

After Trump pulled the United States out of the nuclear deal and reimposed sanctions, Iran’s crude oil exports fell back to less than 100,000 bpd in 2020 from more than 2.5 million bpd in 2018, according to tanker trackers.

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