Baku, Azerbaijan, Sept.10
By Leman Zeynalova – Trend:
Iranian oil exports will withstand the renewed US pressure, Trend reports with reference to Fitch Solutions Macro Research (a unit of Fitch Group).
“Iranian oil exports are under renewed pressure, with the US intensifying its efforts to drive exports to zero. The decision to allow oil sanctions waivers to expire on May 2 triggered a collapse in Iranian exports, which have since averaged 360,000 b/d. This compares to the 1.3mn b/d that were averaged under sanctions with the waivers still in place. Despite all exports now being sanctionable, volumes have continued to flow out of Iran to buyers in markets including China, Syria and Turkey. Exports have become increasingly difficult to track, with tankers routinely turning off their transponders and performing complex chains of ship-to-ship transfers. However, estimates from tanker tracking agencies seem to be loosely in line with our expectations of a 400,000 b/d average for the second half of the year. These agencies also report significant flows in oil products, including fuel oil and LPG, which taken together off a critical source of revenue for Tehran,” reads a report released by the company.
In response, the US has reportedly turned to less conventional methods to choke off exports.
“Reports have surfaced that the Department of State - via Brian Hook, the US Special Representative for Iran - has been contacting the captains of tankers carrying Iranian oil, offering multi-million dollar pay-offs in return for diverting them to markets where they can be impounded for the US and then sanctioning individuals who fail to comply. This couples with the more conventional ratcheting up of sanctions measures targeting the Iranian shipping sector and the ongoing pressure being applied on flag states to deregister Iranian oil tankers. While this will put added strains on Iran, we do not believe it materially alters the outlook for exports, given Iran's ability to conceal its trades, a network of buyers with little or no exposure to the US financial system and little international support for the US' approach to sanctions,” said Fitch Solutions.
Moreover, the report shows that China has thrown Iran a vital lifeline, taking the lion's share of exports in the period since sanctions waivers expired.
“This is not unexpected, given that Beijing and its state-backed enterprises have the greatest capacity to circumvent US sanctions. Based on Bloomberg 's tanker tracking data, around 55% of exports since May have been taken up by Chinese buyers and we expect this dynamic to remain in play over the coming quarters. The prospects for Iranian exports have also arguably improved, as trade relations between China and the US have continued to deteriorate. Beijing and Washington remain fundamentally divided on key issues and the gulf between the two appears to be widening. It is likely that more severe economic pain will be needed, before a more conciliatory approach is adopted. Against this backdrop, we see the potential scope for a higher volume of Chines e imports from,” said the company.
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