Iran's Oil Shipments Halved In May, Report Says
Mardo Soghom
Iran International
Iran’s oil shipments in May dropped by 50 percent, in a sign that Moscow is selling more oil to China and taking Tehran’s market share, a report on Monday said.
Iran International
Iran’s oil shipments in May dropped by 50 percent, in a sign that Moscow is selling more oil to China and taking Tehran’s market share, a report on Monday said.
The data and analytics firm Kpler was quoted by Prague-based, US-financed Persian language Radio Farda as saying that Iran’s illicit shipments of crude mainly to Asian markets dropped to around 400,000 barrels per day (bpd) in May.
The shipments were estimated to have been 908,000 bpd in March and 820,000 in April, as Iran claimed it is selling more than a million bpd in recent months.
When the United States imposed full oil export sanctions on Iran in May 2019, exports dropped from more than 2 million barrels a day in 2016-2017 to around 250,000. China was the main buyer of Iranian crude in this period.
Toward the end of 2020, as it became clear that then-President-elect Joe Biden was determined to revive the 2015 nuclear agreement (JCPOA) with Iran abandoned by his predecessor in 2018, Iranian crude exports began to increase. China might have calculated that the risk of US retaliation decreased with the prospects of talks to restore the nuclear deal.
Exports gradually increased in 2021 as the United States engaged in indirect nuclear talks in Vienna. It reached new highs in early 2022 before the Russian invasion of Ukraine and sanctions on Moscow by many countries. Since then, Russia has apparently turned to China to sell its crude which happens to be Iran’s main oil customer.
In May, Reuters reported that about 20 tankers carrying around 40 million barrels of Iranian oil were waiting near Singapore to sell their cargos. As oil market monitoring firms have reported in the past Iranians oil is sold most probably to middlemen who then transfer the crude to Chinese ‘teapot’ small refineries.
Kpler told Radio Farda that the quantity of Iran’s unsold oil has not changed much, probably because shipments have declined.
Iran has denied that Russia is taking its market share, but $30 barrel reported discounts by Russia are apparently much more than Iran offers to customers willing to take a risk and buy its sanctioned crude.
The hardliner government of President Ebrahim Raisi prides itself for having “defeated US sanctions” and increased oil exports, as it tries to calm a volatile economic environment at home. The danger of three-digit inflation in Iran and the fall of its currency to a historic low over the weekend have led to angry protests on the streets.
The reported fall in exports in May can deal a new blow to Iran’s hard-pressed economy and further destabilize the political scene.
The year-long nuclear negotiations remain in deadlock, as Tehran demands its revolutionary Guard be removed from the US list of Foreign Terrorist Organizations (FTO).
The US has signaled that if talks make no progress and Iran continues to expand its nuclear program, it may decide to tighten the screws on Tehran, which may mean a more rigorous enforcement of existing sanctions.
In an editorial authored by the daily's outspoken managing editor Masih Mohajeri on June 9, Jomhouri Eslami [Islamic Republic] writing about the Iranian government's economic problems said, "A government that holds up payments to pensioners as a bid to solve its economic problems should prioritize its expenditures and get rid of unnecessary organizations."
The daily asked: "Some of Iran's cultural organizations do nothing other than duplicating the efforts of other government institutions. For instance, what kind of service is the Islamic Propagation Organization rendering that justifies its survival?" The newspaper maintained: "The high-maintenance organization should have attained its initial goals during the past 40 years [of an Islamic government]. If it hasn't, it means that it has not been successful."
The Islamic Propagation Organization is a body that operates in parallel with Ministry of Culture and Islamic Guidance and one of its objectives is offering guidelines to Friday Prayer Imams in cities and towns nationwide.
Over the past four decades, the organization's main function has been justifying the government's policies and trumpeting the ideas of fundamentalists in Iran such as the Friday Prayer Imams in Isfahan and Mashhad. The two clerics are often criticized by the people for undermining human rights and advocating violence against women and those who follow a lifestyle different from the preferences of the fundamentalists.
Last week, a young man in Isfahan attacked Yousef Tabatabainejad, the Imam in Isfahan who had opined that people can attack "bad-hijab" women at their own discretion. In their sermons on Friday June 10, several imams made outlandish statements. Ignoring Iran's economic problems, Rasoul Abdollahi who led the prayers in Tabriz said that Raisi's economic policy is being followed in Russia as an economic model for resistance.
Meanwhile, Mohamad Nabi Mousavi Fard in Ahwaz called for shaming those who undermine “Islamic values in the streets” as a lesson for others, while Ahmad Khatami in Tehran and many others in other cities repeated the official jargon about a resolution passed this week at the UN nuclear watchdog, the IAEA, criticizing Iran's non-cooperative behavior and praised the government for undermining IAEA safeguards.
In another article on Thursday, the Jomhouri Eslami wrote that the government has increased the Islamic Propagation Organization's budget by 156 per cent in for the current year. The article charged that the government of President Ebrahim Raisi has started what he called an "economic surgery" by targeting the poorest Iranians while giving more funds to government bodies such as the Islamic Propagation Organization.
Last year the organization received around $40 million based on the average exchange rate in 2021, there fore this year the appropriation is more than $100 million. Although this might not seem like a large sum by Western standards, in Iran an average person has a salary of $150 per month.
Overall, the government spends close to $800 million on propaganda outfits, not counting the state television with close to 40,000 employees and a $200 million budget plus advertising income.
The article went on to say that such organizations have been a burden on the country's annual budget and national financial resources for years without being able to contribute to productive efforts or the nation's welfare. The daily argued that economic pressures should be distributed fairly among various parts of the government and groups of the population.