Iran’s mission to recoup its oil market share in the West is almost complete after exports in May came within a whisker of pre-sanction levels.
Exports to Europe in the month surged to their highest level since the lifting of sanctions in early 2016 to 1.1 million barrels per day (bpd), Reuters news agency reported, citing sources familiar with Iran’s oil exports.
This is a big feat for the country which lost more than half of its market share when the West imposed unprecedented sanctions on Iran in 2011. Except for Turkey, all European customers halted their Iranian purchases, allowing Saudi Arabia to seize on the chance and crank up output.
Old clients such as France’s Total, Italy’s Eni, Spain’s Repsol and Cepsa, Turkey’s Tupras and Greece’s Hellenic Petroleum resumed purchases after the lifting of sanctions, while new customers such as Switzerland’s Litasco and Poland’s Loto joined the trade with Iran.
The country’s exports to Europe stood slightly below the 1.2 million bpd supplied to Asia last month when Iran’s overall production totaled 3.9 million bpd, the report said.
Sales to Asia, which maintained Iran purchases even during the years of sanctions, dropped to their lowest levels since February 2016 because South Korea and Japan lifted more Iranian condensate, a light form of crude oil produced in association with natural gas.
Reuters quoted a source saying that Iran's condensate parked in floating storage has almost been exhausted because of higher purchases by Japan and Korea.
India's decision to cut annual purchases from Iran by a fifth for the fiscal year to March 2018 also weighed on the Asia trade.
India is currently Iran's second biggest oil client after China, lifting a record high of about 541,000 bpd of Iranian oil in the fiscal year to March, a growth of about 115% over the previous year.
However, India’s imports of Iranian crude for this fiscal year are reportedly set to pare at 370,000 bpd after its decision to slash purchases by a fifth.
India has been courting Iran for the development of Farzad B gas field in the Persian Gulf but Minister of Petroleum Bijan Zangeneh was quoted as saying that Russia’s energy giant Gazprom had signed a basic agreement to take up the work.
Indian media said Tehran’s awarding of Farzad B to Gazprom was in retaliation for New Delhi’s recent move to cut purchases of Iranian crude oil.