Iran raises oil exports to West, almost on par with Asia

Exclusive OPEC-OIL/ REUTERS/Raheb Homavandi

By Nidhi Verma | NEW DELHI

Iran’s oil exports to the West surged in May to their highest level since the lifting of sanctions in early 2016 and almost caught up with volumes exported to Asia, a source familiar with Iranian oil exports said.

Iran, which used to be OPEC’s second biggest oil exporter, has been raising output since 2016 to recoup market share lost to regional rivals including Saudi Arabia and Iraq.

While many Asian nations continued to purchase oil from Iran during sanctions, Western nations halted imports, halving Iran’s overall exports to as little as one million barrels per day (bpd).

Last month, Iran exported about 1.1 million bpd to Europe including Turkey, almost reaching pre-sanction levels and only slightly below the 1.2 million bpd supplied to Asia, the source told Reuters.

Iran’s exports to Asia last month were the lowest since February 2016, Reuters’ calculations showed.

Oil exports to Asia fell as South Korea and Japan stepped up oil condensate purchases and bought less oil, said the source, who asked not to be identified as the information is confidential.

“Iran’s condensate parked in floating storage has almost been exhausted because of higher purchases by Japan and Korea,” the source said.

Exports to Asia were also hit by India’s decision to cut annual purchases from Iran by a fifth for the fiscal year to March 2018.

After the lifting of sanctions, Tehran added new clients such as Litasco and Lotos and won back customers such as Total (TOTF.PA), ENI (ENI.MI), Tupras (RDSa.L), Repsol (REP.MC), Cepsa CPF.GQ and Hellenic Petroleum (HEPr.AT).

OPEC member Iran was allowed a small production increase under a December deal to limit output.

ALSO IN BUSINESS NEWS

Amazon-Whole Foods deal roils Wall St.; energy shares gain
Weak inflation erodes conviction at Fed on rate hikes
Iran’s overall May oil production totaled 3.9 million bpd, the source said.

Iran is currently producing about 200,000 bpd of West Karoun grade, which the nation blends with other Iranian heavy grades for export, he said.

For a graphic on Asia’s Iranian crude oil imports, click here

For a graphic on Iranian oil production, click reut.rs/2sbpbWY

(Editing by Jason Neely and David Evans)

Iran signs first major post-election oil deal

Wed May 24, 2017

The National Iranian Oil Company (NIOC) has signed an agreement with a Spanish-Iranian consortium over the production of corrosion resistant pipes used in the oil industry.

The agreement was reported by media to be worth $615 million – or €550 million. It was the first major agreement

that the country signed after the re-election of President Hassan Rouhani.

The consortium, which includes Spain’s Tubacex S.A. and Iran’s Foolad Isfahan Company, will produce pipes made of a corrosion resistant alloy (CRA) for a network of 600 kilometers, or about 370 miles, over three years.

The pipes will be produced using Japan’s JFE Steel Corporation technology, and that the know-how will eventually be given to the Iranians, AP reported.

Ali Kardor, the managing director of the National Iranian Oil Company (NIOC), was quoted as saying by the domestic media that the agreement would make Iran the only country to achieve the technology to produce CRA pipes.

Kardor added that several plants would be set up in Iran over the next few years to produce such pipes, IRNA reported.

At a ceremony marking the signing, Iran’s Petroleum Minister Bijan Zanganeh said he was “delighted that a deal worth more than €550 million is being signed.”

“The Iranian manufacturer is happier than us and perhaps our foreign partner is the happiest party of all today, to have secured itself a long-term market in Iran,” AP quoted Zanganeh as saying.

The minister added that during the years of punitive sanctions over Iran’s nuclear program, the industry faced a severe shortage of pipes and were the sanctions still in place, “we would be unable to produce them now.”

“I think it is the biggest tender we have had in this industry for a lot of years,” said Antonio Rafael, deputy CEO of Tubacex. “It is very professionally managed.”

The agreement was reported by media to be worth $615 million – or €550 million. It was the first major agreement that the country signed after the re-election of President Hassan Rouhani.

The consortium, which includes Spain’s Tubacex S.A. and Iran’s Foolad Isfahan Company, will produce pipes made of a corrosion resistant alloy (CRA) for a network of 600 kilometers, or about 370 miles, over three years.

The pipes will be produced using Japan’s JFE Steel Corporation technology, and that the know-how will eventually be given to the Iranians, AP reported.

Ali Kardor, the managing director of the National Iranian Oil Company (NIOC), was quoted as saying by the domestic media that the agreement would make Iran the only country to achieve the technology to produce CRA pipes.

Kardor added that several plants would be set up in Iran over the next few years to produce such pipes, IRNA reported.

At a ceremony marking the signing, Iran’s Petroleum Minister Bijan Zanganeh said he was “delighted that a deal worth more than €550 million is being signed.”

“The Iranian manufacturer is happier than us and perhaps our foreign partner is the happiest party of all today, to have secured itself a long-term market in Iran,” AP quoted Zanganeh as saying.

The minister added that during the years of punitive sanctions over Iran’s nuclear program, the industry faced a severe shortage of pipes and were the sanctions still in place, “we would be unable to produce them now.”

“I think it is the biggest tender we have had in this industry for a lot of years,” said Antonio Rafael, deputy CEO of Tubacex. “It is very professionally managed.”