Iran Has Sold Its 10 Million Barrels of Oil Reserves in China

Iran says it has sold its ultra-light crude oil (condensate) reserves stored in China. The Shana news agency, the press entity of the Iranian Ministry of Oil, reported on Monday, February 20, that 'the 10 million barrel condensate reserve of Iran in the tanks leased by the National Iranian Oil Company in China has reached zero.' Shana noted that the condensate stored in China was intended for quick shipment to East Asian countries. The report adds that Iran had stored condensate in Chinese tanks due to sales problems during the sanctions period. After the imposition of sanctions over its nuclear program, Iran faced a significant reduction in oil and condensate exports. Condensate is a type of ultra-light crude oil that is produced from gas fields. Before the sanctions, Iran exported 2.5 million barrels of crude oil and condensate, but this amount fell to 1.2 million barrels after the sanctions, which led Iran to close some of its oil wells. However, since stopping or reducing condensate production requires closing gas wells, Iran continued to produce this type of ultra-light crude oil. Nevertheless, due to the lack of customers, it stored the produced condensate in tankers anchored in the Persian Gulf and transferred some of these shipments to leased warehouses in China. According to statistics from the U.S. Energy Information Administration, Iran's oil and condensate reserves at sea during the sanctions period were about 50 million barrels, most of which were condensate. Recently, Ali Kardar, the head of the National Iranian Oil Company, also stated that in 2013, Iran had 75 million barrels of unsold condensate stored, which has now decreased to 25 million barrels and is expected to reach zero by the end of April 2017. Over the past years, Iran has increased its condensate production alongside gas production. According to the latest statistics from the Ministry of Oil, Iran had a daily condensate production of 560,000 barrels until early winter. However, the Shana report indicates that Iran currently produces 600,000 barrels of condensate daily, which is nearly double the production level before the sanctions. According to Shana, with the implementation of the JCPOA, Iran's crude oil and condensate exports increased from 1.2 million barrels at the beginning of Hassan Rouhani's administration to 2.8 million barrels. The report states that currently, the majority of Iran's condensate is exported to Asian and European countries.