Relative Improvement in Iran's Petrochemical Industry

The National Petrochemical Company of Iran reported on Saturday, April 1, that the country's petrochemical complexes exported over 22.41 million tons of products worth more than $12 billion last year. The report did not mention changes in petrochemical exports compared to the previous year, but a comprehensive report on the petrochemical sector from last year indicates that the volume of petrochemical exports increased by 10% compared to the previous year, and export revenues from petrochemical products showed an increase of nearly 26%. The main reason for the discrepancy between the growth in volume and value of exports is that oil prices increased by more than 25% last year compared to the previous year, and consequently, the prices of petrochemical products also rose. The annual value of global petrochemical markets exceeds $3 trillion, which is approximately 1.5 times the crude oil market. Comparing Iran's petrochemical exports to the global market value of these products shows that Iran's share is very small, but statistics from this decade indicate that Iran lost a significant portion of its markets during sanctions and has been gradually regaining these markets over the past few years. Official statistics show that at the peak of oil and petrochemical prices, Iran lost a large part of its markets due to sanctions, and after the start of Rouhani's government, export volumes increased again, even surpassing the pre-sanction period. However, due to a significant drop in oil and petrochemical prices compared to the Ahmadinejad era, revenues are still less than in 2011. Part of the increase in petrochemical export volume is related to a significant increase in Iran's petrochemical production capacity. Last year, Iran's annual petrochemical production capacity increased by more than 18% compared to the beginning of this decade, reaching about 64 million tons. During the sanctions, a large portion of Iran's petrochemical capacity remained idle due to falling export levels. In 2014, at the peak of sanctions, over 30% of Iran's petrochemical capacity was unused. However, last year this figure dropped to 16%, indicating that Iran is still not utilizing its full petrochemical production capacity due to export issues. Production planning was also 2 million tons less than what actually occurred. Last year, Iran produced a total of 53.6 million tons of petrochemical products, of which 9.35 million tons were sold to domestic petrochemical complexes for the production of value-added products, while the rest was sent to domestic and foreign markets as final products.