Iran increases oil exports as main buyer China cuts Russian purchases

Iran’s oil exports jumped 30% from a year ago to 870,000 barrels per day (bpd) in the first quarter of 2022, The Wall Street Journal reported on Thursday, citing data from the data provider on raw materials Kpler, as the main buyer of Iranian crude, China, is reducing its imports of Russian oil.

The jump in Iranian oil exports in the first quarter was the fastest among any Middle Eastern producer, while export volumes are estimated to be the highest since former US President Donald Trump stepped down from the so-called Iran nuclear deal in 2018, Kpler said. , as reported by the Journal.

Russia’s invasion of Ukraine has upended global oil trade flows and encouraged Iran to increase exports – despite still being under US sanctions with no imminent nuclear deal in sight – to its main customer, China. . The world’s largest crude oil importer, China, for its part, has not rushed to buy cheap Russian oil.

Iran sells its crude oil almost exclusively to China and has never stopped these sales since former President Trump reimposed sanctions on Tehran in 2018. Currently, China is also being encouraged to import more Iranian crude, not expecting to be hit with secondary sanctions by the United States for dealing with Iran “because Washington has its plate full with Russia,” a Kpler analyst told the Journal.

In the Iranian year that ended on March 20, 2022, Iran’s oil exports increased by more than 40%, Iranian Petroleum Minister Javad Owji said earlier this month, tel as reported by the information service of the Ministry of Petroleum Shana.

“He further stated that Iran’s Petroleum Ministry would never disclose the methods and destinations of its oil exports,” the agency reported in early April.

Meanwhile, Chinese refiners are not rushing to buy heavily discounted Russian crude on the spot market, avoiding being named as buyers of Moscow’s oil amid tougher Western sanctions on Russia. China, which has forged increasingly close ties with Russia in the energy sector in recent times, has not officially condemned Vladimir Putin’s war in Ukraine, but its government has recently sounded cautious with respect to new cash agreements. China has yet to show too much of an appetite for Russian crude due to several factors, according to energy consultancy Wood Mackenzie. These include expensive freight for Russian cargoes due to sanctions, problems with payment and insurance of tankers, the fact that a trip to the Urals takes twice the time compared to the grades of the Middle- Orient to China, and Chinese refiners’ long-term contracts with Middle Eastern oil exporters.

By Tsvetana Paraskova for Oilprice.com

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