Iran's petrochemical exports face difficulty in China and India

Oil&Gas Materials 21 June 2019 14:32 (UTC +04:00)

Tehran, Iran, June 21


The volume of Iran's petrochemical exports is increasing despite problems with banking transactions and restrictions in the return of foreign currency revenues that effect the sale.

"India and China are the traditional markets for Iran's petrochemical exports, but under current conditions these countries have suspended the trade. South East Asia and African countries are other importers of Iran's petrochemical products," said Ehsan Bagheri, spokesman for Iranian Oil, Gas and Petrochemical Products Exporters' Union in an interview with Trend.

"Improving the banking mechanism will definitely help, but the volume of transaction is so high that China’s Bank of Kunlun or Bank Pasargad branch in India are not able to manage the high value transactions for petrochemical exports. Although the petrochemical enterprises are inclined to work via foreign exchange offices, this contains risk," he said referring to Iran banking problems in India and China.

"We do not seek to increase petrochemical production; at the moment the issue is the sale, and we should increase the exports," he added.

Speaking about the latest statistics on gasoline production and exports, he said that about 1.940 million barrels of gasoline are produced per day. "Iran exports 200,000 barrels of gasoline a day. This volume is exported to north of Iraq, and Afghanistan and to southern neighbor countries".

"There are certain problems with exports by the public sector, but the private sector has more flexible approach, since its trading figures are smaller", he noted. "The financial transaction and bypassing sanctions create costs that are managed by private sector. The return of capital in public sector is related to agreement between countries. The government suffers from the sanctions more than the private sector, as the government activities are monitored, therefore the opportunities of the private sector shall be used."

"There are also problems in the exports of petrochemical products, as there are logistic issues for ships in exporting petrochemical products. The foreign exchange policy creates problem and reduces the exports", he said.

"Comparing exports statistics of 2017 and 2018, it can be said that there is no serious change in exports volume. There was decline during the second half of last Iranian year [March 21, 2018 - March 20, 2019]; however the difference was not dramatic. The statistics for the current Iranian year have not publicized yet," he added.