Iran's Liquefied Gas Exports Reach Highest Level This Year

Iran's liquefied petroleum gas (LPG) exports reached 381,500 tons in July, the highest level recorded this year, showing a 39% increase compared to exports in June (274,000 tons). The highest level of LPG exports from Iran previously occurred in January, amounting to 360,000 tons. LPG includes propane and butane, which are primarily produced from oil wells. The significance of Iran's liquefied gas exports lies in the fact that this crude oil product contributes significantly to Iran's export revenues. Iran lists LPG exports among its non-oil goods, and according to official customs statistics, Iran exported about $2 billion worth of butane and propane last solar year, accounting for 4.5% of Iran's total non-oil exports. This figure was approximately $3.5 billion before Western sanctions. Global oil prices have also seen a significant decline since mid-2014. According to Platts, Iran exported a total of 1,940,000 tons of LPG from January to July, with 968,000 tons sent to China and several shipments also exported to Indonesia. Exports to Indonesia followed a May agreement last year between Indonesia's state-owned Pertamina and the National Iranian Oil Company for the delivery of 600,000 tons of LPG in 14 shipments during 2016-2017. Under this contract, the first shipment of 44,000 tons was delivered to Pertamina last October. Subsequently, one shipment was delivered in November, one in December, one in late January or early February, one in March, and one in May. All shipments were loaded at the Assaluyeh port in Iran. Pertamina received the last shipments in June and July. China is another destination for Iran's LPG shipments, with the country being a customer for about half of Iran's liquefied gas exports. Additionally, the Thai company Siam Gas is an active buyer of Iranian LPG, having imported 352,000 tons in the form of eight shipments from Iran this year. Other companies such as Trillions Petrochemical, Jovo Energy, Arab Transport Oil Company, and Sinochem have also imported LPG from Iran this year. According to trade sources, Iranian LPG compensates for the shortages in the Asian market caused by a lack of supply from the U.S. or other producers in the Middle East.