Iran is relying on a network of foreign refiners to secure demand for its crude oil amid the stranglehold of sanctions, Argus has reported, citing export data and sources from the industry.

Last year, Iran’s crude oil production rose by a sizeable 650,000 bpd, the report noted, largely thanks to an improvement in exports, which averaged almost 1.3 million barrels daily, per Vortexa data. That’s up from about 1.05 million bpd for full 2023 and a little over 800,000 bpd for 2022.

As in previous years, the bulk of those daily exports went to Chinese refiners who have developed a taste for discount Iranian crude—thus ensuring sustained demand for it. But Iran has also been exporting crude to allies Syria and Venezuela, to feed Syria’s 140,000-bpd Banias refinery and Venezuela’s El Palito facility, which has the same daily processing capacity as Banias.

“The biggest benefit of such refineries is securing markets for the stable sale of our crude,” Ali Shahverdi, who is in charge of relations with overseas refiners at state downstream company NIORDC, told Argus.

Iran is looking for long-term commitments, the report also noted, that would make it harder for the buyer to give up Iranian crude, if they wanted to, for some reason. The pool of such buyers is limited, Argus also wrote, but Iran seems to be making good use of what buyers are available to it.

“The sanctions that the US imposed on [state-run oil firm] PdV in 2019… dramatically increased relations with Russia first,” the director of the Latin American energy program at Rice University’s Baker Institute, Francisco Monaldi, told Argus.

“But when secondary sanctions kicked in [in 2020], we saw a severing of relations with [Russian state-owned] Rosneft, and China and India stopped buying [Venezuelan] crude. This is when the relationship with Iran took on another level,” Monaldi explained.

Source » oilprice