Iran's Oil Exports at 'Highest Level' in Two Years

Iran's oil exports in January and February of this year are expected to increase by more than 20% compared to last year following the lifting of sanctions. Iran's crude oil exports in February are projected to be around 1.44 million barrels per day, while in January, it is expected to be about 1.5 million barrels per day, which is 20% higher than the average daily exports last year. This volume of crude oil exports from Iran is the highest since February 2014. Analysts say that the increase in Iranian exports will add to the surplus oil in the market, which is currently estimated at about one million barrels per day. Iran intends to start supplying oil to global markets that it has stored over the past four years. The U.S. Energy Information Administration estimates that the amount of this stored oil in tankers is between 30 to 50 million barrels. Iran's return to the market after the lifting of international sanctions this month is being closely monitored, as the global supply surplus has reduced prices by about 70% compared to mid-2014. Meanwhile, hopes that other major producers, including Saudi Arabia and Russia, will cooperate with OPEC to limit production have increased prices this week. A large portion of the approximately 40 million barrels of oil that Iran has stored on its tankers is condensate, and the faster the ultra-light oil (condensate) is sold, the quicker ships can be loaded for sale. Iran's oil sales in the past four weeks, following the lifting of sanctions this month, have increased by about a quarter compared to 1.21 million barrels during the same period last year. Sanctions against Iran's nuclear program, which had halved Iran's daily oil exports since 2011, were lifted this month. In this context, an Iranian oil official told Reuters, 'Why not? Nothing can stop us. Exports must definitely increase.' Meanwhile, Iran has targeted the Indian oil market, which has the highest growth in Asia, as a primary destination. Compared to imports of 183,000 barrels per day in January, India will import 300,000 barrels per day in February. Reuters reports that Iran's oil exports to Asia in February will reach 1.2 million barrels per day, with January's figure estimated at 1.24 million barrels. Iran plans to deliver 504,000 barrels per day to its main customer, China, in February, which is five percent less than the amount for January. Iran will also sell 303,000 barrels per day to India in February, which is 66% more than sales in January and the highest since May 2015. Exports to Japan and South Korea in February will be less than in January, with exports to these countries in January being the highest in several months.