Page 48 - IRANRptJul22

Iranian gas flow to Azerbaijan under gas swap with Turkmenistan to ‘at least double’
Iran struggles to sell crude now at anchor in Asia
An agreement to at least double the volume of gas delivered to Azerbaijan through Iranian pipelines under a gas swap deal involving Turkmenistan has been struck, Iranian state news agency IRNA has reported.
The deal could take the volume from 1.5bn cubic metres (bcm) to 3 bcm or more.
Azerbaijani Economy Minister Mikayil Jabbarov and Iranian Oil Minister Javad Owji were reported as signing a memorandum of understanding for the volume boost on June 3 in Baku.
Gas supplies from Iran to Azerbaijan under the gas swap arrangement with Turkmenistan began in January, according to a trilateral agreement signed by Azerbaijan, Iran and Turkmenistan in Ashgabat last November.
Under the scheme, Turkmenistan supplies 5-6mn cubic metres per day of gas to Iran’s northeastern regions, while Iran supplies the same amount to Azerbaijan on its northwestern border.
An estimated 40mn barrels of Iranian crude oil is currently stuck offshore in ports around Asia looking for a buyer.
As prices of Russian crude have fallen in the weeks following Moscow’s invasion of Ukraine, more and more oil cargoes from Iran have found themselves without end destinations.
The majority of these cargoes fell foul of Asian markets seeking to save money on cheaper, better-quality Russian imports. In the three months since the outbreak of war in Ukraine, sanctions by the US and other Western countries had left Russia looking for buyers for its crude.
But with India, and increasingly China, seeking to benefit from Russia’s current focus on Asia, one casualty has been Iran.
In the months leading up to the February 24 invasion, Iran had been making headway in increasing its crude sales to China. In March, China bought between 700,000 and 900,000 barrels per day (bpd), illustrating its growing importance as a buyer for Iranian oil.
But now these efforts by Iran to step up crude exports to China have stalled, with sales in April thought to be 200,000-250,000 bpd down on March. As soon as Western sanctions were imposed on Russia in late February and early March, with Russia trying to offload its crude by offering discounted prices, more expensive Iranian cargoes found themselves unwanted.
This now leaves an estimated 40mn barrels of Iranian crude at sea with no buyers. Singapore alone is estimated to have around 20 tankers loaded with Iranian crude currently anchored offshore, according to shipping data. Some of these vessels are known to have been in place since at least February, awaiting buyers willing to skirt sanctions imposed by the US and other countries on oil exports from Iran. Figures from data and analytics firm Kpler this week have determined that 37mn barrels were anchored off Singapore a week ago. This figure is up 15mn barrels on the previous month.
An Iranian Oil, Gas and Petrochemical Products Exporters Union spokesman, Hamid Hosseini, said: “Russia can switch almost half of its exports to Southeast Asia, especially China ... and that is a huge potential threat for Iranian crude exports.”
Kpler has stated that Iranian exports of crude averaged 930,000 bpd across the first quarter. The bulk of this went to China.
April figures were down to 755,000 bpd, although Iranian crude sales are notoriously difficult to confirm, with many buyers seeking to avoid scrutiny by US agencies charged with maintaining sanctions against Iran.
“China is now clearly buying more Russian Urals cargoes," said a Kpler senior
48 IRAN Country Report July 2022 www.intellinews.com