Spain Purchases New Oil Shipment from Iran

Iran has announced that it will deliver a shipment of one million barrels of crude oil to Repsol of Spain for next month. This is the third single shipment of oil that Iran has sold to Spain since the lifting of sanctions. Before the sanctions, Spain received about 150,000 barrels of oil per day from Iran, but like other Europeans, it stopped purchasing Iranian oil when Western sanctions began in 2012. The sanctions against Iran were lifted in January of this year. The Shana news agency reported on Monday, July 7, that Repsol signed a contract to import one million barrels of crude oil for delivery in July, which will increase Iran's oil exports to Europe next month. The report adds that the upward trend in Iran's oil exports to Europe, which began with the implementation of the Joint Comprehensive Plan of Action (JCPOA) last December, continues to expand, and new oil shipments are expected to head to the continent next month. It further states that Iran's oil exports to Europe have increased from 100,000 barrels during the sanctions to nearly 600,000 barrels, and it is estimated that this could rise to 700,000 barrels per day. Turkey was the only European customer for Iranian oil during the sanctions, which, according to OPEC reports, reduced its imports from Iran by up to 40% compared to pre-sanction levels, importing just over 100,000 barrels per day last year. A report published by Bloomberg on Monday indicated that Iran's oil exports to Europe reached over 350,000 barrels per day last month, although this figure dropped to 285,000 barrels in the first three weeks of this month. This statistic does not include exports to Turkey. Bloomberg states that Iran's current exports to Spain are about 50,000 barrels per day, which is still three times less than in 2011. The significant fluctuations in Iran's oil exports to Europe are due to the fact that Iran is currently exporting only in single shipments to Europe and has a long-term oil sales contract only with Total. Shana, citing a report from the OPEC Affairs Department and Energy Relations of the Ministry of Oil, reports that in March 2016, for the first time after the lifting of international sanctions, a shipment of one million barrels departed from Khark Island to Spain. This amount tripled in April, with at least three refineries belonging to Repsol, CEPSA, and BP receiving Iranian crude oil in April. The faster-than-expected return of Iranian oil to the European market has led Russia to offer Urals crude oil at the highest discount in two years to maintain its market share in the region. During the Iranian oil sanctions, Russian Urals crude had been able to replace Iranian oil in Europe due to its qualitative proximity. In the Asian market, the upward trend in Iranian crude oil exports continues. According to the latest reports from international organizations such as the International Energy Agency, Iranian oil exports increased to 2.1 million barrels in May. Some reports suggest that Iranian oil exports may have reached about 2.3 million barrels this month.