Iranian exports of crude oil fell sharply again in April and could be down by as much as 1 million barrels a day this quarter as many countries reduce imports ahead of sanctions that come into effect on July 1, the International Energy Agency said Friday.
Iranian exports of crude oil fell sharply again in April and could be
down by as much as 1 million barrels a day this quarter as many countries
reduce imports ahead of sanctions that come into effect on July 1, the
International Energy Agency said Friday.
Iran
's oil
production remained steady at 3.3 million barrels a day in April, but it did
not sell 15% to 25% of that oil and instead pumped it into floating tanker
storage, the IEA said. The country could only keep this up for a couple of
months before filling its storage and having to shut down fields, said David
Fyfe, head of the oil markets division at the IEA.
This fresh data from the IEA, which represents the interests of major energy-consuming
rich countries, shows how the economic pressure of Western sanctions is
ratcheting up ahead of crucial talks on
Iran
's
nuclear program in
Baghdad
later
this month.
It also shows how, due to oil production increases from other members of the Organization
of Petroleum Exporting Countries, sanctions should be able to proceed without
hurting oil consumers.
"There is enough room between the level of OPEC production and the level
of the call on OPEC [oil] to allow for a greater disruption to Iranian
supplies," said Olivier Jakob, Managing Director of consultancy
Petromatrix.
In order to either dodge sanctions or obscure their impact,
Iran
's
fleet of oil tankers have started to play "hide and seek" by
disabling their tracking beacons, the IEA said in its monthly oil market
report.
Out of 38 Iranian oil tankers, only one is currently broadcasting its location,
according the tracking service Marine Traffic. The lack of data makes it
difficult to precisely determine how badly the sanctions are affecting
Iran
's oil
earnings.
In official submissions to OPEC, the Iranian authorities claim to have actually
increased oil production by 38,000 barrels a day since the new sanctions were
agreed in January, to 3.8 million barrels a day in April. OPEC's own analysts,
using secondary data sources, estimate that
Iran
's oil
production has fallen by 152,000 barrels a day since January to 3.2 million
barrels a day in April.
Preliminary trade figures show the Islamic Republic's crude exports fell by
600,000 barrels a day to 1.6 million barrels a day in April, a shipping source
told Dow Jones Newswires last week.
Based on the average price of
Iran
's
main heavy-crude export grade, a drop in exports of this size would have lost
the country around $2 billion in revenue.
A top Iranian oil official declined to comment on the latest IEA data. Other
oil officials in
Tehran
confirmed last week to Dow Jones Newswires that the amount of oil the country
is storing in ships doubled to 24 million barrels between March and late April.
If
Iran
fills
its storage and is forced to shut down fields, it could have effects beyond
lost export earnings, said Fyfe. Domestic natural gas supply, which also comes
from oil fields, could be affected and there is a danger of long-term damage to
the productivity of older fields, he said.
The oil market should still be able to cope with the withdrawal of as much as 1
million barrels a day of Iranian crude without dipping into oil stocks, despite
supply and demand being "marginally tighter" in the second half of
the year, Fyfe said.
The IEA slightly increased its estimate of global demand for OPEC crude in the
second half of the year to 30.8 million barrels a day, but production from the
group in April was 31.89 million barrels a day. "OPEC's Gulf producers
appear to have ramped up output ahead of the anticipated disruption in Iranian
crude flows," the IEA said.
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