Tabnak – As the US President Donald Trump is expected to announce his decision on the Iran nuclear deal tonight, there are renewed discussions over the possible impact of the US withdrawal on Iran’s oil industry. Although the Iranian oil exports have experienced revival after the deal, the future is still uncertain.
According to a Press TV report, Refinery maintenance coupled with a release of floating storage volumes pushed Iran's crude and condensate exports in April to multi-year highs, although output remained stable.
Sources have said the rise in exports last month could be a way for Iran to prepare itself for a more challenging environment amid the growing likelihood that US sanctions could restrict the country's crude flows.
Demand for Iranian crude in China and India is likely to remain very strong even if sanctions are imposed, though refiners in Europe, South Korea and Japan are likely to tread more carefully.
Total estimated export volume on Aframaxes, Suezmaxes and VLCCs from Iranian ports in April rose 16% to 2.70 million b/d from 2.32 million b/d in March, according to data from S&P Global Platts trade flow software cFlow.
In this vein, although it’s believed that Iran’s oil industry may be heading for choppy waters from a possible US re-enactment of sanctions, the country’s officials foresee a thriving year during which as many as 17 upstream contracts are expected to be finalized.
Last year marked the National Iranian Oil Company (NIOC) signing three major oil deals for the first time since the lifting of sanctions in early 2016. The company expects to finalize seven more upstream contracts worth around $40 billion with foreign investors by October, NIOC deputy head Gholamreza Manouchehri said on Monday.
“I have to emphasize that negotiations on the fields are being done with the current challenging situation being included in our projections,” Manouchehri told reporters on the sidelines of an international petroleum exhibition in Tehran.
The new contracts are signed under the new Iran Petroleum Contract (IPC) which is offering better incentives than the buy-back agreements Iran offered in the past.
At the current situation, European refiners, say that Iranian crude remains very competitively priced against sour grades from Iraq, Russia and Saudi Arabia. But with expectations of US sanctions, some refiners have been starting to buy more Iraqi and Saudi barrels for June in case Iran's exports are immediately impacted.
Iran has doubled its oil exports since the landmark deal with Western powers to lift sanctions on its oil industry was implemented in January 2016. After four years of crippling curbs on its oil exports, Iran surprised most by ramping up production and broadening its customer base in Asia and Europe.
Exports averaged 2.12 million b/d in 2017, compared with just 1.13 million b/d in 2015, when the sanctions were still in place, he report added.
