Iran to Export Oil to North Korea

Iran's oil ministry said it was considering exporting oil to North Korea. The official IRNA news agency today quoted Oil Minister Rostam Qasemi as saying talks were under way between Tehran and Pyongyang on oil exports. (IRNA, 20 April)

An oil deal with North Korea will bring the two countries closer together and will add to the volume of Iran’s exports that has been severely cut due to sanctions. 

Iran’s Annual Non-Oil Exports at $41.5 Billion

Iran’s Customs Administration Director Abbas Memarnejad said the country’s non-oil exports in Iranian calendar year that ended on 20 March were $41.5 billion, while it imported $53.3 billion worth of goods excluding oil products, Fars News Agency reported today.

The volume of non-oil imports to exports decreased to $11.8 billion from $18 billion in its preceding year. Oil products that are not included in non-oil imports include condensates (a kind of oil with premium quality which is derived from gas wells), processed oil products such as furnace oil and gasoline and diesel fuel, as well as petrochemical products.

The government has not yet filed reports on oil exports and oil-related imports last year, but the chairman of Majlis Budget Reconciliation Committee said on Sunday the proposed budget for the current Iranian calendar year (1392) estimates oil exports at 1.3 million barrels a day, a drop from last year’s budget of 2.7 million bpd. 

Iran Oil Exports to Hit Low of 810,000 bpd

Sanctions and Slow Oil Consumption in March

Iran's crude oil exports in March could fall to lowest levels since sanctions began last year. Reuters reported today that Iran’s oil customers will load 810,000 barrels per day (bpd) of crude in March. Last month, Iran exported an average of 1.1 million bpd.  

China, India, South Korea and Japan, Iran’s top four customers, are scheduled to load 703,000 bpd in March versus about 960,000 bpd a month earlier. The actual numbers may ultimately vary slightly.

Indian refiners struggling to find insurance coverage for processing imported Iranian crude was one of the factors for the drop. India is scheduled to lift 117,000 bpd in March versus 279,000 bpd a month ago. The country's biggest buyer of Iranian crude, Mangalore Refinery & Petrochemicals Ltd. (MRPL), has said it will have to stop its purchases.

South Korea may lift just 60,000 bpd. It cut shipments to meet the 20 percent target cut believed to be required to receive exemptions from U.S. sanction. 

Japan's loading may drop 20 percent to 148,000 bpd from 184,000 bpd, the lowest since September. But China’s imports will rise slightly in March, from 379,000 bpd from 354,000 bpd. Last year, China was importing 438,448 bpd. (Reuters, 11 March)

Global oil consumptions also slow down in March and could be an added factor is slowing down Iran’s exports this month.

File photo: Iran’s crude oil export terminal at Kharg Island (Getty Images)

Asia Purchasing Nearly All of Iran’s Oil Exports - Report

Four Asian countries are now purchasing nearly all of Iran’s oil exports, the Economist’s Intelligence Unit (EIU) reported this week.

“Almost all of Iran's oil exports now go to China, South Korea, Japan and India,” said the report. The report also noted a sharp decline in the amount of oil each of these countries purchased from Iran during 2012. (EIU/The Diplomat, 5 January)

Iran’s oil exports have been cut in half as a result of U.S. and EU sanctions that were enacted last year. The International Energy Administration (IEA) has estimated Iran’s current exports at 1.1 million barrels a day, as compared to 2.2 million b/d in 2001. Iran’s government budget for the Iranian calendar year that began last March also forecasted oil exports of 2.2 b/d. Oil exports make up 80% of Iran’s total export earnings and 50-60% of government revenues.

The situation is only likely to worsen for Iran in the months ahead. The rise in oil exports by Iraq and Libya, coupled with a sluggish global economic growth has made it easier for the West to sustain the sanctions without seriously upsetting oil prices, the report indicates. Also, next month a new provision of U.S. sanctions will go into effect, prohibiting countries to transfer payments for oil to Iran directly or through a third-party, instead requiring that these funds be deposited and kept in banks located in the purchasing country and used by Iran only to purchase approved goods and services.

File photo: Iran’s Kharg oil export terminal (Getty Images)