Page 4 - DMEA Week 44 2021

DMEA COMMENTARY DMEA

Iran plans to restart

petroleum product exports

While Tehran has not yet resumed talks regarding the renewal of the JCPOA,
the country is eyeing an immediate uptick in petroleum product exports.

MIDDLE EAST IRANIAN authorities expect to resume the week, he said that if such an investment is not
export of petroleum products from the Islamic made, Iran will face declining output and will
Republic within two weeks, Minister of Petro- eventually become reliant on imports.
WHAT: leum Javad Owji said on November 2. Owji has said that $145bn is required to build
Iran has said it expects The export of petroleum products from Iran out the country’s oil sector, with another $22bn
legal oil product exports was limited in July-August at the direction of needed just to maintain gas production levels,
to resume within weeks former President Hassan Rouhani, with the out- though Iranian sources told Downstream MEA
despite not having going Cabinet of ministers ordering the filling of (DMEA) this week that the latter refers only to
reached a new deal on storage tanks for petroleum products at all distri- the South Pars gas field, with the country-wide
sanctions. bution and export terminals. gas figure closer to $50bn.
“I believe that within two weeks we will This was corroborated by the director-gen-
WHY: resume the export of oil products,” Owji said. eral of the National Iranian Oil Co. (NIOC),
The country’s economy Despite Iranian optimism, terms are no Mohsen Khojastepur, who said this week that
has suffered under closer to being agreed for a renewal of the 2015 the $50bn figure is required to ensure that Irani-
widespread restrictions Joint Comprehensive Plan of Action (JCPOA), ans do not face a shortfall in gas supplies during
on trade. though Tehran has said it will resume negotia- winter months despite annual overhaul work
tions by the end of the month. being carried out at South Pars to guard against
WHAT NEXT: instability of winter supplies.
The US has expressed Exports
willingness to stick Speaking to on the Islamic Republic of Iran Edging towards a deal
to a renewed deal Broadcasting TV station, Owji said that the Attempting to coax Iran into re-entering nego-
but optimism in the country’s “oil sales situation has improved tiations on reviving the 2015 nuclear deal, US
short term should be significantly.” President Joe Biden pledged on October 31 that
tempered with the He said that one of current President Ebra- if the US returned to the agreement, it would
reality of challenges him Raisi’s top priorities is to strengthen Iran’s only subsequently leave if Tehran clearly broke
posed by Iran’s hardline position in OPEC after having been placed on its terms.
leadership. special measures owing to US sanctions bar- Although Iran has said it will return to the
ring the legal export of crude oil. The country talks on the deal by the end of November, major
is understood to have exported more than 1mn powers in the West have become increasingly
barrels per day (bpd) in recent months through anxious that the delay in returning to the talks
third parties and intermediaries to clients like caused by Iran’s new hardline presidency is a
China, but sales are well down on the 2.8mn bpd subterfuge.
level achieved, albeit briefly, in 2018. They worry that Tehran has been using the
Independent assessments of Iranian ship- lengthy postponement to build up its uranium
ments suggest that sales have been as low as stockpile, work around UN nuclear inspec-
200,000 bpd and exports have mostly travelled tions and increase its knowhow in the field
via third-party countries in the Gulf, including of advanced centrifuges that produce highly
the UAE and Oman. enriched uranium. Though Iran continues to
Other export hubs have included Singapore, insist it has no ambitions to develop a nuclear
where large quantities of oil have been traded by weapon, Western officials are concerned that
third-party companies, while direct shipments Iran’s “breakout” time for developing such a
have been sent to the few countries retaining weapon could decrease to the point that the value
friendly relationships with Tehran, including of returning to the JCPOA would be minimal.
Venezuela, Syria and Lebanon. Biden made his commitment, responding
In September, Owji said: “I promise that good to one of Iran’s negotiating priorities, in a joint
things will happen regarding Iran’s oil sales in the statement issued with Germany, France and the
coming months.” UK. It came after a meeting on the margins of
With that in mind, he has reiterated plans the G20 in Rome attended by Biden, Germany’s
for the government to invest around $160bn Angela Merkel, France’s Emmanuel Macron and
to maintain and increase oil and gas flows. This the UK’s Boris Johnson.

P4 www. NEWSBASE .com Week 44 04•November•2021