Iran’s exports of fuel and petrochemical exports have surged in recent years as the re-imposition of the U.S. sanctions on the country’s oil industry curbed crude sales, the Daily Star reported.
The situation has left Iran in a good position to be able to expand trade in Asia and Europe rapidly if the sanctions are removed, the report said quoting trade sources and officials.
The United States imposed sanctions on Iran’s oil and gas industry in 2018 to choke off the Islamic Republic’s main source of revenues. The sanctions significantly declined crude exports but not sales of fuel and petrochemicals.
Iran exported petrochemicals and petroleum products worth almost $20 billion in 2020, twice the value of its crude exports, oil ministry and central bank figures show. The government said in April they were its main source of revenues.
“The world is vast and the ways of evading sanctions are endless,” Hamid Hosseini, board member of Iran’s Oil, Gas and Petrochemical Products Exporters’ Union in Tehran, told Reuters. Competitive prices and Iran’s location, close to major shipping lanes, made its products attractive, he said.
There are also many more buyers of refined products than importers with refineries configured to process Iranian crude.
In addition, Iran exports some fuel by trucks to its neighbors, which involve small transactions that are tough for the U.S. Treasury to detect.
Tehran has been in talks since April to revive its nuclear pact with six world powers after the United States under President Donald Trump withdrew from the deal in 2018 and ratcheted up sanctions. Iran says it will only comply with the pact if U.S. sanctions are scrapped.
Meanwhile, the Islamic Republic has completely prepared itself to boost its oil production if the measures are eased. While most of the world slashed refinery throughput during the COVID-19 pandemic, Iranian gasoline exports rose 600 percent year on year in 2020 to eight million tons, or 180,000 barrels per day (BPD), the customs administration said. This is while as recently as 2018, Iran had been importing gasoline.
Iran’s revenues from gasoline exports were an estimated $3 billion in 2020, Hosseini said.
Iranian oil production is now about 2.5 million BPD, with around two million BPD allocated to domestic refineries and roughly 500,000 BPD to exports, a source close to the oil ministry said, adding that Iran could boost crude output by two million BPD in two to three months if sanctions were lifted.