Dubai: Iran is shipping the most crude in almost five years, fortifying its re-emergence on the geopolitical stage while posing risks for a fragile global crude market.
Exports have surged to the highest level since US sanctions were re-imposed in 2018, according to a range of analysts. The vast majority is flowing to China, as the world’s biggest importer scoops up cut-price barrels from the Islamic Republic.
Rebounding sales are the most tangible sign yet that Iran — while still reeling financially from years of isolation — is reasserting itself, having started to repair ties with regional rivals, fostered relations with Asia’s leading power, and even begun a tentative diplomatic engagement with Washington.
Yet the extra supplies are sapping confidence in an oil market weakened by faltering economic growth and cheap Russian cargoes, frustrating efforts by Iran’s partners in the OPEC+ alliance to put a floor under crude prices.
“Iran’s crude exports smashed it last month,” said Homayoun Falakshahi, a senior analyst at Kpler.
Crude shipments have doubled since last autumn to reach 1.6 million barrels a day in May, even as American sanctions remain in place, according to the firm. Production has hit 2.9 million barrels a day, the highest since late 2018, the Paris-based IEA estimates. Consultants SVB Energy, Petro-Logistics SA and FGE believe that output is even higher, maybe surpassing 3 million barrels a day.
Read the article by Grant Smith and Anthony Di Paola in The Sydney Morning Herald.