Economic interest remains most important for the countries around the world, irrespective of their being or not being part of any bloc or pressure group. This seems omnipresent when one looks at the developed countries buying oil from Iran, and defying economic sanctions. This leeway was initially given by the United States to a few countries, but others are also joining the exempt elites.
In one of its latest reports Reuters said, “Iran’s crude oil exports in December leapt to their highest level since European Union sanctions took effect last July, analysts and shipping sources said, as strong Chinese demand and tanker fleet expansion helped the OPEC member dodge sanctions.”
According to the report, oil exports from Iran rose to around 1.4 million barrels per day (bpd) during December 2012. Western sanctions had halved Iran’s oil exports during 2012 from 2.2 million bpd in late 2011. But continuous robust demand from top buyer China and others such as India and Japan, as well as the purchase of new tankers, allowed Iran to boost exports late last year.
According to the Reuters report Iran shipped more than 1.4 million bpd of crude oil in December and there are indications that exports would remain around the same level during January-March quarter of 2013.
This represents an increase from a low-point of less than 900,000 bpd in September and suggests monthly revenues worth approximately $4.7 billion based on December Brent prices.
One of the factors helping Iran to boost its oil export was purchase of tankers from China, which enabled it to ship more oil, even if shipping companies from other countries were not willing to carry the load.
This has taken some pressure off Iran and facilitated tanker traffic and analysts foresee further increase in oil export to China.
It is also believed that the rise in oil exports from Iran to near 1.4 million bpd was the result of traditional buyers finding new ways to secure insurance of oil being carried by the Iranian tankers.
About the author: Shabbir H. Kazmi
Shabbir H. Kazmi is an economic analyst from Pakistan. He has been writing for local and foreign publications for about quarter of a century. He also has his own blog at ‘shkazmipk blog’. He can be contacted at [email protected]