Iran oil export analysis in past 3 months (Analysis)

08 August, 2018
Source: Platts

Iranian oil exports fell to their lowest in four months in July, S&P Global Platts estimates, as key buyers have started to curtail their purchases as the first set of US sanctions on Iran kick in.

Total estimated export volumes on Aframaxes, Suezmaxes and VLCCs from Iranian ports in July fell by 7% to 2.32 million b/d from 2.49 million b/d in June, according to data from S&P Global Platts trade flow software cFlow.

Flows from Iran to China and India -- its two key customers -- remained high, but exports to South Korea, Europe fell steadily as these buyers start to elsewhere.

Iran's oil exports have now fallen for three successive months as the country braces itself for the re-imposition of sanctions by the US.

Iran's oil flows are expected to fall in the coming months as the second round of US sanctions, which target the oil sector, resume in early November.

Some sources have said with exports falling, Iran's domestic refinery runs have increased, with a pick-up in gasoline output observed at some of its refineries, and more barrels are expected to go onto floating storage.

Iranian oil production fell to 3.72 million b/d in July -- the lowest since January 2017, according to Platts estimates.

Exports to Asia fell to 1.76 million b/d in July from 1.85 million b/d in June as demand from South Korea and Taiwan dissipated as the former turned to other countries for condensates.

However, loadings to China were 799,452 b/d in July, up from 722,100 b/d in June. Last week, a news report said Chinese officials has rejected US requests to cut imports of Iranian oil but added that China's imports might not rise further than current levels.

Flows to India in July were higher despite some Indian refiners saying they would reduce their reliance on Iran. Iran's oil exports to India rose by more than 40,000 b/d from June to 706,452 b/d in July.

India finds itself in a diplomatic predicament as it tries to maintain stable oil supplies without attracting the ire of the US Administration. But for now India's thirst for Iranian crude has not diminished and has even grown sharply year on year.

Exports to Japan surged to a seven-month high as refiners rushed to secure as many cargoes as possible before US sanctions are re-applied.

Exports to South Korea fell to zero as it is already starting to find alternative supplies to Iranian condensates after pressure from the US.

Flows to Europe in July fell to 465,450 b/d from 485,768 b/d as demand from France, Spain, and Turkey fell while interest from Italy and Greece grew steadily.

Spot demand for Iranian crude in Europe has fallen sharply, but those refiners that have term deals with Iran are still honoring their contracts, sources said.

Europe is an important outlet for the OPEC member, and the region was taking around 600,000-700,000 b/d, or a third, of Iranian crude exports until May this year.

Analysts expect Iranian exports to drop by anything between 500,000 and 1 million b/d after full US sanctions are re-imposed on November 5.

Buyers of Iranian crude oil and condensate:

Destination

July

June

May

China

799,452

722,100

751,645

India

706,452

670,433

710,936

Japan

185,709

145,867

106,258

Italy

135,581

71,700

164,967

Turkey

131,548

170,467

99,774

Spain

97,290

103,267

116,258

UAE

96,967

124,100

117,193

Unknown

68,581

0

33,677

Greece

67,354

36,567

103,677

Other Europe

33,677

0

0

South Korea

0

174,300

127,612

Taiwan

-

133,133

0

France

0

103,767

55,903

Chile

-

32,800

0

Poland

-

-

33,387

Total

2,322,611

2,488,501

2,421,287

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