Imports of Iranian crude highest since sanctions imposed: IEA

A new report by the International Energy Agency (IEA) shows that imports of Iranian crude oil by other countries have reached their highest level since international sanctions were imposed on Iran’s energy sector.

According to the Bloomberg quoting IEA’s report, oil-importing nations bought the highest quantities of Iranian crude in May since the United States and the European Union tightened sanctions on the country’s energy sector on grounds of its peaceful nuclear program.

Sanctions were imposed on Iran by the US and EU at the beginning of 2012, alleging that there was diversion in Iran’s nuclear program toward military objectives; an allegation that Iran categorically rejected.

The Islamic Republic and the P5+1 group of countries – the US, the UK, France, Germany, Russia and China – reached a mutual understanding on April 2 in the Swiss city of Lausanne, which is considered a prelude to the achievement of a comprehensive deal on Tehran’s nuclear program before a self-designated deadline at the end of June. A key point of the Lausanne statement was a promise to lift a series of economic sanctions on Iran – including those on the country’s energy sector.

According to IEA’s monthly oil-market report, imports of Iranian crude hit 1.4 million barrels a day in May, showing an increase of up to 235,000 barrels compared to April, and reaching the highest level since June 2012.

The country produced a total of 2.85 million barrels a day of crude oil last month, IEA added.

“Tehran continues to prepare for the day when international sanctions are lifted,” the Paris-based IEA, which advises 29 countries on energy matters, said.

The report noted that Iranian fields “are in theory capable of producing as much as 3.4 million to 3.6 million barrels a day within months of sanctions being lifted.”

The report further added that it is not clear “how much, if any, of the May volume came out of floating storage.”

Speaking to reporters in Malaysian capital city, Kuala Lumpur, in May, Deputy Minister of Petroleum Roknoddin Javadi said the country had about 10 million barrels of crude sitting in storage on ships.

China and India have been the main customers of Iranian oil since 2012 “and Tehran is expected to target Asia for its additional crude if and when sanctions are lifted,” the IEA report said.