Export of Iranian crude to countries in the Asia Pacific region fell by 15% in 2013. These figures are expected to recover slowly this year, as western sanctions on Iran ease.
Reuters are reporting that China, India, Japan and South Korea together cut imports from Iran to an average of 935,862 barrels per day (bpd) in 2013. That would mean a revenue loss of $46 billion for Tehran, based on pre-sanction crude exports of about 2.2 million bpd.
Any increased oil production from Iran would weigh on oil prices after other OPEC producers such as Saudi Arabia raised exports to fill the gap created by the Western sanctions, as well as by outages in North Africa and the Middle East.
But there are doubts over how soon Iran could return its exports to pre-2012 levels, especially with Asian buyers reluctant to agree to large increases in import volumes until a final diplomatic agreement is reached.
“We don’t see any real reason for the negotiations to result in a substantial settlement,” Fereidun Fesharaki, chairman of FACTS Global Energy, told Reuters.
“We think this could go on for several years and no substantial amount of Iranian oil will come to the market,” he told Reuters.
Last week, the United States and the European Union began following through on promised sanctions relief for Iran covering oil exports, trade in precious metals and automotive services as part of a nuclear agreement signed in November that began taking effect on 20th January 2014.
As part of that deal, Iran is due to receive on 1st February its first $550 million instalment of a total $4.2 billion in oil funds to be released if its sticks to the agreement to curb its nuclear programme.
