Iran will be able to sell an average 800,000 to 1mn barrels per day (b/d) of crude oil even if the US refuses to extend 180-day waivers allowing eight countries to continue taking its shipments without fear of sanctions, a former US State Department official who managed sanctions on Iran during Barack Obama’s administration has been reported as saying.
Amos Hochstein, now a senior vice president at US-based liquefied natural gas company Tellurian Inc, told Bloomberg on February 7 that Iran can slip some of its oil exports past US sanctions—introduced last November 5 and aimed at eventually reducing Iran’s oil consignments to zero—to a few countries which will purchase the crude with or without waivers because they “don’t care about exemptions”. Hochstein did not specify the countries he had in mind.
February 11 brought the 40th anniversary of the Islamic Revolution. But Iran’s energy industry had little to celebrate. Iranian crude output has yet to recover to pre-revolution levels—prior to 1979 Iran was pumping more than 6mn b/d—and is unlikely to do so for many years, even without US sanctions. To even approach those levels, Iran’s oil sector needs massive foreign investment and until there is a stable investment environment in the country almost all the required foreign investors will steer clear.
Iran produced around 2.74mn b/d of oil in January, Bloomberg data show.
While Tehran could quickly boost output to 4mn b/d, a return to 6mn b/d “is a much bigger endeavour and needs the confidence of international firms to come back”, Richard Mallinson, an analyst with consultant Energy Aspects in London, was cited as saying by the news agency.
Turkey, China, India, Japan, South Korea, Taiwan, Italy and Greece received the granted oil import waivers from the US, although Iran has complained that the latter two countries are, without explanation, not purchasing Iranian oil despite holding the sanctions-protected right to do so. Whether or not the US extends the waivers, due to expire in early May, may depend on whether the Trump administration believes extensions are needed to keep oil prices down.
Since the energy sanctions levied against Iran kicked in, Turkey’s imports of Iranian crude have remained constant at about 150,000 b/d, and Japan and South Korea have continued to take regular shipments, Ezzatollah Moslehi, deputy director for international affairs at the state-run National Iranian Oil Co says.
Iran has the world’s fourth largest oil reserves and second largest gas reserves.
Oil, gas and petrochemical exports are targeted by the energy sanctions.
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