Iranian oil exports end 2022 at a high, despite no nuclear deal

Iranian oil exports hit new highs in the last two months of 2022 and are making a strong start to 2023 despite US sanctions, according to companies that track the flows, on higher shipments to China and Venezuela.
Tehran’s oil exports have been limited since former US president Donald Trump in 2018 exited a 2015 nuclear accord and reimposed sanctions aimed at curbing oil exports and the associated revenue to Iran’s government.
Exports have risen during the term of his successor President Joe Biden, who had sought to revive the nuclear deal, and hit the highest since 2019 on some estimates.
This comes despite headwinds such as a stall in those talks and competition from discounted Russian crude.
Energy consultant SVB International said Iran’s crude exports in December averaged 1.137mn barrels per day, up 42,000 bpd from November and the highest 2022 figure SVB has reported based on estimates given earlier.
“In comparison to the Trump administration, there hasn’t been any serious crackdown or action against Iran’s oil exports,” said Sara Vakhshouri of SVB. “January exports were so far strong like previous months.”
“Lower Chinese demand and Russia’s supply to China have been a major challenge for them. Most of its oil still goes to the Far East, ultimately China. Iran also helps Venezuela to export its oil.”
Adrienne Watson, a National Security Council spokesperson at the White House, said the administration’s enforcement of the sanctions is robust, and “Iran’s macroeconomic figures clearly bear this out.”
“We have not and will not hesitate to take action against sanctions evaders, together with sanctions against Iran’s missile and drone trade, and human rights violations against the Iranian people,” Watson said.
Consultant Petro-Logistics, which tracks oil supply, said it was also seeing an upward trend in Iranian crude exports which, in its view, in December reached their highest level since March 2019.
Kpler, a data intelligence firm, put Iranian crude exports at 1.23mn bpd in November, the highest since August 2022 and almost on a par with April 2019’s rate of 1.27mn bpd, although they slipped to just below 1mn bpd in December.
The Iranian oil ministry did not respond to a request for comment on exports.
Iran’s draft state budget is based on even higher shipments of 1.4mn bpd, the semi-official Fars news agency reported this week.
China is Iran’s biggest customer.
To evade sanctions, most of Iran’s crude exports to China are rebranded as crude from other countries, according to analysts including FGE.
Also, Iran last year expanded its role in Venezuela, also under US sanctions, sending supplies of light oil for refining and diluents to produce exportable crude grades.
There is no definitive figure for Iranian oil exports and estimates often fall into a wide range.
Tanker-tracking companies use various methods to track the flows, including satellite data, port loading data and human intelligence.
Iran generally does not release figures.
According to another analyst, Vortexa, China’s December imports of Iranian oil hit a new record of 1.2mn bpd, up 130% from a year earlier.
“Most of these shipments found home in Shandong, where independent refiners have turned to discounted grades since the second half of 2022 amid sluggish domestic demand and depressed refining margins,” the company said.
The press department of China’s Foreign Ministry, in response to a request for comment, said: “The legitimate and reasonable cooperation between China and Iran under the international legal framework deserves respect and protection,” without directly addressing Reuters query on China’s record Iranian oil purchases.
Vortexa said supply of Russian Urals, the main competing grade to Iranian oil, fell in December — when a price cap on Russian crude exports and European Union ban created uncertainty for buyers. A revived nuclear deal would allow Iran to boost sales to former buyers like South Korea and Europe.