Page 49 - IRANRptJun22

Iran moving forward to execute condensate-for-cru de swap deal with Venezuela
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 analyst, Homayoun Falakshahi. "Exports of Urals to China have more than tripled. That comes despite a weakening in Chinese imports.”
Yet whilst on the surface indications point to Russia and Iran competing for Asian buyers, it is thought that the countries are actually working together to help Russia keep its export infrastructure alive. Iran has years of experience in maintaining exports whilst under international sanctions.
Russia’s Deputy Prime Minister Alexander Novak visited Tehran this week accompanied by representatives of Russian transportation and logistics agencies.
Meetings were scheduled with Iran’s Ministry of Roads and Urban Development in addition to the influential Ports and Shipping Organisation, although official announcements or details on agreements have yet to be released.
Sources speaking to some news agencies have indicated, however, that Russia has been looking for information on trading oil whilst sanctioned.
Iran appears to be moving forward with implementation of the co-operation deal signed during Oil Minister Javad Owji’s visit to Caracas earlier this month.
That agreement provides for Iran to supply the South American country with refinery equipment, as well as assistance with overdue work at the state-owned El Palito refinery in Carabobo. The 140,000 barrel per day (bpd) facility has not been able to keep to its regular repair and maintenance schedule, as its owner, the national oil company (NOC) PdVSA, is a target of US sanctions.
The recently penned deal between Tehran and Caracas also provides for Iran to send shipments of gas condensate to Venezuela in exchange for Venezuelan crude. PdVSA is already using Iranian condensate to dilute and upgrade extra-heavy oil from the Orinoco belt into an exportable grade of synthetic crude.
Since last autumn, deliveries of this blendstock have played a significant role in helping Venezuela’s oil sector recover from the ravages of the sanctions. As a result, production levels rose to 700,000 bpd in the first four months of 2022, marking a stark rise on the 470,000 bpd figure posted in the same period of
49 IRAN Country Report June 2022 www.intellinews.com