Iran sidesteps oil sanctions
Iran is looking to export increasing amounts of oil to China and Asian markets by finding a way to sidestep Western sanctions. This will expand the value of its trade by potentially billions of dollars a year.
In doing so, Iran counts on the United States and Europe in order to tolerate an increasing export stream.
In the last three months, the sales have generated as much as $1.5 billion in extra trade — a rate of about $6 billion a year.
The result has been an overall increase in petroleum shipments to China and other Asian markets without violating the letter of the sanctions.
The increase in condensate exports compensates for a small part of Iran’s lost oil revenues. According to OPEC estimates, the value of Iranian oil exports in 2013 had plunged to $62 billion, down from $102 billion in 2012 and $115 billion in 2011.
Under the sanctions, crude oil exports to most nations are now banned. As for natural gas, Iran was banned from exporting it to the European Union in late 2012, but not to Asian markets — providing an opening for the gas condensates sales.
Yet, according to OPEC rules, condensates are not included in oil export quotas allotted to its members even though they are commonly included in statistics for oil production and reserves.
“For U.S. regulations, we can’t export condensates because it’s a crude oil, but in sanctions for Iran they can export condensates because it’s not a crude oil,” noted Larry Goldstein, a director of the Energy Policy Research Foundation, an organization partly financed by the oil industry.
In the end, energy experts say the extra supply of Iranian condensates on the world market can have some benefits, at least for a short while, given the potential for big disruptions in global oil supplies from mounting crises in Libya, Iraq and Ukraine.
Source: NYT
