Volume. 12227

Growing Iran oil exports challenge U.S. nuclear sanctions
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Iran’s oil exports have risen this year, according to Bloomberg calculations, a trend that threatens to violate U.S. sanctions on the Islamic Republic’s main source of revenue.
Shipments of Iranian crude oil and condensate have increased about 28 percent on average this year, according to an analysis of customs data from importing nations and figures from the International Energy Agency in Paris. If crude sales are up by the end of July, that would break an international accord to hold Iran’s oil exports at the same level in the first half of this year that they were at in the previous six months.
Questioned in Congress about possible sanctions violations, an Obama administration official who monitors Iran’s oil exports said he’s confident Iranian crude shipments have remained within the limits set in a six-month agreement signed Jan. 20 that granted Iran limited sanctions relief in exchange for some nuclear concessions.
“Where we are today, we feel comfortable that the crude oil exports of Iran are remaining in the 1 million to 1.1 million barrels per day average,” Amos Hochstein, deputy assistant secretary of state for energy diplomacy, testified before the House Foreign Affairs Committee.
The U.S. Congress passed legislation in December 2011 to curtail Iran’s oil exports in an effort to deprive the Persian Gulf state of its leading foreign revenue earner. A month later, the European Union approved an embargo on Iranian oil purchases by its members.
Only six buyers are still allowed to take crude from Iran - - China, India, Japan, South Korea, Turkey and Taiwan -- down from 21 before the restrictions went into effect in mid-2012.
Among the reasons that exports in the first few months of this year look higher are seasonal variations in oil purchases and the fact that reporting lags shipments and customs data are sometimes revised, according to two U.S. officials who weren’t authorized to be quoted.
Another reason is that while India’s crude imports from Iran were up significantly in the first few months of this year, its refiners have signed contracts for lower purchases in the coming months, which should bring down Iran’s average exports by July, the officials said.
The Obama administration says Iran’s oil exports have been reduced by more than half from 2.5 million barrels a day before sanctions. The U.S. also says Iran is losing as much as $5 billion a month in oil revenue.
Customs and other publicly available data, though, show that Iran’s exports of crude and condensates rose to an average of 1.33 million barrels a day in the first four months of this year from 1.04 million barrels a day on average in 2013, according to Bloomberg calculations.
Iranian Oil Minister Bijan Zanganeh, asked by a reporter at an OPEC meeting in Vienna, gave a higher figure, saying the Persian Gulf producer is exporting 1.2 million barrels of crude oil and 300,000 barrels of condensate a day.
U.S. officials say Iran consistently inflates trade figures to create an illusion that sanctions are crumbling.
Using customs and ship-tracking data to assess Iran’s oil export quantities is complicated by the fact that crude and condensates can be transported by the same type of tanker or blended together and that some countries combine the two in their import data.
Condensate, a light petroleum liquid often found with oil or gas, is not restricted by U.S. sanctions as long as the buyer nation was granted a waiver from the sanctions by reducing the amount of crude oil it buys from Iran.

(Source: Bloomberg)

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