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Weapons of Mass Destruction (WMD)

Iran Press TV

Iran oil products expose frailty of US sanctions web

Iran Press TV

Tue Sep 3, 2019 10:46AM

Oil products are emerging as Iran's mainstay in a grueling battle with the United States which is bent on wiping out the country's revenues.

New shipping data shows oil product sales mainly remain unfazed by the US sanctions which President Donald Trump imposed last year after withdrawal from the 2015 nuclear agreement with Tehran.

According to Minister of Petroleum Bijan Zangeneh, Iran's product exports reached their highest level in August, even though he did not reveal their volumes.

One energy consultancy, cited by Reuters, put Iran's product exports at 400,000-500,000 barrels per day (bpd). The news agency, meanwhile, estimated oil product sales by Iran at about $500 million a month.

Fuel oil used for power generation and shipping and liquefied petroleum gas (LPG) used as cooking gas and petrochemical feed constitute the bulk of Iran's oil product exports.

China is the main buyer of Iranian LPG. It accounted for more than 95% of Iranian LPG exports which totaled 579,000 tonnes (more than 200,000 bpd) in June, according to data intelligence firm Kpler.

Iran also exported more than 230,000 bpd of fuel oil in August to the United Arab Emirates, which took in 220,000 bpd of the product in July, Reuters reported.

Much of the oil products sold by Iran is presented on Iran Energy Exchange (IRENEX) which has a ready list of potential buyers.

On Tuesday, 71,000 tonnes of LPG was offered on the platform, some 62,000 tonnes of which was taken for shipment to neighboring Pakistan, Afghanistan and Armenia, IRNA said.

Iran has also presented crude oil on IRENEX, but there has been a dearth of buyers. The reason is the ultimate buyer for crude oil is a refinery which makes an easy target for US sanctions.

Fuel oil and LGP buyers, however, are potentially thousands of small-scale industrial and residential entities which are impossible to sanction.

According to Iman Nasseri, managing director for the Middle East with Consultancy FGE, the market for fuel oil and LGP is so vast that finding and targeting those individuals is not easy.

LPG is Iran's third biggest export item after oil and petrochemical products. An escalating trade war between the United States and China has been a boon to Iran's LPG which has found brisk customers in the Asian giant.

Consultancy group Energy Aspects said it expected Chinese demand for Iranian LPG to rise because of the new capacity which China's petrochemical companies are creating, Reuters reported.

China also continues to buy oil from Iran, though in lower volumes. Data released by China's General Administration of Customs (GAC) last Tuesday showed the country imported more than 900,000 metric tons of crude oil from Iran in July, up more than 8 percent from the month before.

Beijing has pushed back against the United States, saying China's cooperation with Iran is legitimate under international law and should be "respected".

Earlier this month, a report said China has "re-engaged" Iran on three key energy projects which the Asian giant is adamant to carry on with their implementation despite US sanctions.

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