Page 39 - IRANRptOct19

US ‘unlikely to win battle against Iran’s oil exports with China, Syria, Turkey still buying’
Iran ‘has hit record levels of petrol production’
National Petrochemical Company, reportedly said at the fair.
The country’s investment in petrochemicals—an attractive industry for Iran given the cheap feedstocks that it can process from its plentiful oil and gas reserves—will rise to $93bn by 2025 from $53bn today, Mohammadi said.
The US has since May been attempting to entirely drive Iranian crude oil off world export markets. Iran has turned to the grey market to try to combat its strategy, but in the meantime the country has also been boosting exports of petrochemicals, directly or through its commodity exchange.
While the US sanctions have since last November applied to petrochemicals, it is generally recognised by industry figures that Iran has been finding it easier to export some petrochemicals while attention has been so fixed on oil.
The annual value of Iran's petrochemicals products should rise to more than $25bn with production capacity of more than 100mn mt by 2022, compared with a value of $16bn currently, Zanganeh was also cited as saying. Production of the gas-derived petrochemical feedstock ethane could reach 16mn mt/year in 2021, the minister was also cited as saying, adding that its production stood at 7.3mn mt in 2018.
Washington is not likely to succeed with its campaign to drive Iranian oil exports to zero and Iran is expected to maintain its shipped crude consignments at 400,000 b/d in the second half of 2019 and 2020, according to a Fitch Solutions Macro Research research note cited by Rigzone on September 10.
“Despite all [Iran oil] exports now being sanctionable, volumes have continued to flow out of Iran to buyers in markets including China, Syria and Turkey,” the note said.
“Exports have become increasingly difficult to track, with tankers routinely turning off their transponders and performing complex chains of ship-to-ship transfers,” the note added.
China has thrown Iran a “vital lifeline” and taken the lion's share of exports in the period since sanctions waivers expired in May, according to the note. “This is not unexpected, given that Beijing and its state-backed enterprises have the greatest capacity to circumvent US sanctions,” it stated.
Some analysts have considered whether China might use its oil trade relationship with Iran as a bargaining chip in its trade war with the US. There is the possibility that Beijing might agree to curtail imports of Iranian oil as part of a trade deal with Washington, but with the prospects of that having deteriorated in recent weeks, there may also be a higher chance that China has become more open to consignments of crude from the Islamic Republic. “Based on Bloomberg's tanker tracking data, around 55 percent of [Iranian oil] exports since May have been taken up by Chinese buyers and we expect this dynamic to remain in play over the coming quarters,” the cited note added. The US has set out to cripple Iran’s economy to force Tehran to make concessions on its nuclear and ballistic missile programmes and its support provided to militias across the Middle East that are variously enemies of Israel and Arab allies of Washington.
Iran hit a record 76mn litres of Euro-4 grade petrol produced in its refineries in the final month of the 2018/2019 Persian year (ended March 20) and was presently managing to keep up with that level, official energy news agency Shana has quoted the country’s oil minister as disclosing. Iran’s ​Persian Gulf Star Refinery now produces the bulk​ of locally consumed petrol, which is some of the cheapest in the world thanks to the Islamic Republic’s vast oil resources and subsidies. Another phase of the refinery was launched earlier this year. The low cost of Iranian petrol and the severe
39​ IRAN Country Report​ October 2019 www.intellinews.com