Alex Lawler

LONDON, (Reuters) – Iranian oil exports rose to over 1 million barrels per hour for the first time since almost three years. This is according to estimates by companies tracking the flow, which reflects increased shipments from China.

Iran’s oil exports are now limited after Donald Trump’s 2018 withdrawal from the 2015 nuclear agreement and his reimposition of sanctions that were intended to reduce oil exports and revenue for Iran’s government.

Iran continues to export some goods despite the sanctions. Intermediaries have found ways to hide the source of imports. According to tanker tracking companies, most of these shipments are headed for China.

While President Joe Biden discussed China’s imports, he hasn’t imposed any sanctions on Chinese companies or individuals. China has asked the United States for the lifting of sanctions against Iran.

On Tuesday, direct talks between Iran’s government and the United States about reviving their nuclear agreement resumed. Iran may resume oil sales if the talks succeed.

According to oil industry analysts and consultants, Iran was able to boost its exports in spite of the sanctions. These exports still fall well short of the 2.5 million barrels per hour (bpd), which were shipped in the days before sanctions were reimposed.

Petro-Logistics is a consulting firm that tracks oil flow and said Iran’s crude exported rose to over 1,000,000 bpd in December, the highest in nearly three years. However, they fell to 700,000. bpd in January.

Petro-Logistics chief executive Daniel Gerber stated that he wouldn’t be surprised to see 1,000,000 bpd on a consistent basis unless there was a shift in the political environment.

Senior trade sources said that January volume fell by around 300,000 bpd over December. They also added that there was a shortage in ships and the volumes can fluctuate.

As tight supply in the world has pushed oil prices up to $94 per barrel, the Iranian increase in exports is a result. The lifting of U.S. sanction would theoretically allow Iran to bring crude oil exports back towards 2.5 million barrels per day, which was the last time this happened in 2018.

Reuters asked Iran’s oil ministry and foreign ministry for comments on oil export levels.

China’s foreign minister responded to questions about Iranian oil imports by China, saying:

China and the “international community” have been cooperating with Iran in a normal manner under the international legal framework. These are legitimate and reasonable. “They deserve respect and protection,” said the spokesperson for China’s Foreign Ministry.

LOWER IN JANUARY

Another consulting company that monitors Iranian oil supplies, SVB International, noted an increase of Iranian crude oil exports, but it recorded the increase in January, rather than December.

Based on SVB estimates crude exports reached 1.05 million bpd January. This is an increase of 826,000 in December. SVB hasn’t seen any significant difference in January exports as of February.

Sara Vakhshouri is president of SVB.

She stated that January’s oil exports have been the most since Trump stopped waivers. Waivers had provided exemptions to certain Iranian oil buyers, but these waivers were stopped by the Trump administration in 2019.

Iran exports are not known in a single figure and many estimates fall within a broad range. Iran does not usually release figures on oil exports.

China brought in 600,000 barrels per day of Iranian oil last year. This was mainly due to crudes coming from Oman, Oman, and Malaysia. Vortexa Analytics oil data analysts said. Comparing this to the pre-Trump peak, which was 623,000 barrels per day, is quite a feat.

China announced in January that it had received its first Iranian crude imports in one year.

A source that tracks Iranian flows said the December volume was even greater at 1.2million bpd. However, he also agreed with Petro-Logistics about the decrease in January shipment volumes.

Source: “Almost all that volume went into China,” the source said, but was not authorized to talk to media.