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Despite Sanctions, Iran’s Oil Exports Hit New Highs in 2022 and 2023

moneyandmarkets.com
moneyandmarkets.com

Oil exports from the Islamic Republic of Iran hit new highs in the last two months of 2022 and are making a strong start to 2023, despite United States sanctions, according to companies that track the flows on higher shipments to China and Venezuela. The latest development comes as the ayatollahs boast their funding capabilities to terrorist groups in the Middle East.

According to reports, Tehran’s oil exports have been limited since the former Trump administration in 2018 exited the 2015 nuclear accord and reimposed sanctions that curbed oil exports and the regime’s revenue.

However, in the past year, oil exports have surged during President Biden’s term, who had sought to revive the nuclear deal, and have hit record sales since 2019 on some estimates.

Energy consultants like SVB International noted that Iran’s cured exports last December averaged 1.137 million barrels per day, up to 42,000 BPD from last November, making it the highest 2022 figure SVB has reported based on estimates given earlier.

“It’s no mystery why the Iranian regime has been able to sell more oil – the Biden administration let it by not enforcing U.S. sanctions. This failure has not only allowed the regime to fill its coffers and fund the daily executions of innocent Iranians but also empowered the Chinese government – America’s top adversary and perpetrator of the Uyghur genocide, said Len Khodorkovsky, former State Department official under the Trump administration.

Sara Vakhshouri, an officer at SVB, noted that in comparison to the Trump administration, “there hasn’t been any serious crackdown or action against Iran’s oil exports.”

“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, to China. Iran also helps Venezuela to export its oil,” said Vakhshouri.

In response to the latest developments, White House officials have said that the administration’s enforcement of the sanctions is robust and that Iran’s “macroeconomic figures 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,” said National Security Council spokesperson Adrienne Watson.

Last year, the Treasury Department imposed sanctions on an oil smuggling ring linked to Iran’s Islamic Revolutionary Guards Corps (IRGC).

Organizations like Consultant Petro-Logistics, which tracks oil supply, explained it also saw an upward trend in Iranian crude exports which, in its view, in December reached their highest level since March 2019.

Data intelligence firms like Kpler also put Iranian crude exports at 1.23 million BPD in November, the highest since August 2022 and almost on par with April 2019’s rate of 1.27 million BPD even though they slipped below 1 million BPD in December.

China is the regime’s biggest customer, and to evade sanctions, most of Iran’s crude exports to China are rebranded as crude from other countries.

The Islamic government has said documents were forged to hide the origin of Iranian cargo. Last year, the regime expanded its role in Venezuela, which is also under U.S. sanctions, sending light oil supply for refining and diluents to produce exportable crude grades.

While 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. According to the energy analyst company Vortexa, China’s December imports of Iranian oil hit a new record of 1.2 million BPD, up 130 percent from a year prior.

An official from Vortexa told media outlets that most of these shipments were in Shandong, where independent refiners have “turned to discounted grades since the second half of 2022 amid sluggish domestic demand and depressed refining margins.”

Vortexa also noted that the supply of Russian Urals, the competing grade to Iranian oil, fell in December because of a price cap on Russian crude exports and a ban from the European Union that resulted in uncertainty for buyers.

In response to the news, China’s Foreign Ministry described the cooperation between China and Iran as “legitimate” and “reasonable” under the international legal framework that “deserves respect and protection.”

During the Biden presidency, the administration and the Islamic Republic of Iran have been unable to agree on Tehran’s nuclear program because of differences among officials.

With protests ongoing in Iran over the death of 22-year-old Mahsa Amini at the hands of the Islamic morality police for her hijab wear, the administration has paused negotiations with Tehran over its nuclear program, with some officials declaring its end.

Related Story: Under New Cooperation, Iran Tanker Arrives in Venezuela

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