Iran oil shipments are declining at a faster-than-expected pace ahead of U.S. sanctions set to begin in November.
Iran expects crude exports to fall by a third in September, according to people familiar with purchasing plans, potentially posing an unforeseen supply risk to markets. Officials at the state-run National Iranian Oil Co. provisionally expect crude shipments to drop to about 1.5 million barrels a day next month, down from about 2.3 million barrels a day in June, say people familiar with the country’s ports loading program.
Many experts had expected oil shipments to decline by about 1 million barrels by year’s end. Now some of them say that fall may have already happened. Iran hasn’t yet announced its exports this month or its forecast for next month.
The developments reflect in part a reluctance of tanker companies to ship Iranian oil.
Oil companies have until Nov. 4 to adjust to a U.S. ban on buying Iranian oil following President Trump’s decision in May to pull out of the nuclear agreement with Tehran. The Europe Union, China and other countries have vowed to resist the unilateral U.S. sanctions and are trying to find ways to keep buying crude from Iran. But they have struggled to find banks, shipping companies and insurers that are willing to risk running afoul of the U.S.
The managing director of Iran’s state oil company, Ali Kardor, didn’t return a request for comment. A spokeswoman for Iran’s oil ministry said she had no information about upcoming Iran oil exports.
Countries such as India, Japan and European Union members complied with a previous round of U.S. sanctions on Iran in 2012. What has changed since that time is that the Trump administration, unlike the prior U.S. administration, isn’t pushing for import reductions but a complete halt, said Sara Vakhshouri, president of Washington-based oil consultancy SVB Energy International.
The P&I Clubs’ reinsurers cover around 90% of the world’s shipping tonnage, including oil tankers. Mr. Salthouse said “if we provide insurance in breach U.S. sanctions, that would deny us access to U.S. financial system, that would put us out of business overnight.”
Source: WSJ.com
