By Staff Writer
Iranian oil exports began to drop noticeably in August as some of Iran’s biggest customers began to reduce or cut completely their purchases, in order to comply with incoming US sanctions on Iran, which aim to cut Iran’s oil exports to zero.
Iran’s sales on crude oil and condensate fell below 2 million barrels per day (bpd) in August, according to tanker tracking data compiled by Bloomberg, which is the lowest level in over a year.
This trend continued into September, with reduced Iranian oil exports and predictions from some analysts that more of Iran’s oil customers will cut their purchases in coming weeks as the November sanctions get even closer.
While Iranian oil exports rose by 200,000 bpd in the first half of September, compared with the first half of August, this will not save the Regime. Exports are still considerably down compared with the previous months and this rise was likely only an attempt by some countries to increase their oil stores before the sanctions kick in.
Even Iran’s second-biggest oil importer India is expected to reduce its purchases to comply with US pressures. Meanwhile Europe, who is still firmly committed to the nuclear deal that Donald Trump pulled out of sparking sanctions, is also likely to cut its Iranian oil imports to avoid US sanctions.
While some countries, including India, are attempting to secure sanctions waivers from the US in the coming weeks, their chances are slim and they will have to make a backup plan.
When sanctions on Iranian oil return, experts are estimating that Iran’s daily oil exports could drop by more than 1 million barrels, which would be highly damaging to the Regime, considering that oil accounts for 70% of Iran’s exports.
The International Energy Agency (IEA) said last week that prices of Brent Crude could rise above $80 per barrel if other producers don’t make up for Iranian oil losses.
While Amrita Sen, chief oil analyst at Energy Aspects, said that Iran’s exports to fall by between 1.5 million to 1.7 million bpd by the end of 2018, which means that they will only be exporting 1 million bpd at the beginning of next year.
This is still not enough, however, as the money that Iran will get from the oil will be spent on warfare and terrorism, rather than improving the lives of the Iranian people. The sanctions must be stronger and bring Iranian oil exports to zero.