US seeks to clamp down on rising Iran oil sales

Market: Crude oil
24/01/23

The US is "not fine" with the upward trend in Iran's oil exports in recent months and will continue to "do more" to dissuade and put pressure on countries taking more oil from Iran, the US state department's special Iran envoy Rob Malley said.

Speaking to Bloomberg TV, Malley said the US extra-territorial sanctions that have been in place on Iran and its oil sales since former US President Donald Trump pulled Washington out of the Iran nuclear deal in 2018 are still very much in place and have not been "loosened or lessened".

He acknowledged the rise in Iran's oil sales since late last year, saying that Washington is monitoring the situation closely, and taking steps to clamp down on the rising flows — particularly when it comes to China. The country has been the biggest destination for Iranian crude by some distance since the sanctions came into force.

"We keep trying…to take the steps we need to stop the export of Iranian oil and deter countries from buying it," Malley said. But when "you focus on China, that's right. It has been the main destination of elicit exports by Iran."

Oil analytics firm Vortexa pegs Iran's overall crude and condensate exports at 1.28mn b/d for the fourth quarter of 2022, up by 56pc compared with 818,200 b/d in the third quarter, and up by 51pc on 844,700 b/d in the fourth quarter of 2021.

Argus' tracking puts Iran's crude and condensate exports at 1.11mn b/d on average in the fourth quarter, up by 43pc from 776,000 b/d in the third quarter, and by 58pc from 704,500 b/d in the corresponding quarter in 2021.

The increase in Iranian shipments coincided with a rally in Chinese demand for oil with refinery runs hitting an 18-month high in November, and remaining high in December. Chinese imports from Iran via Malaysia rose to a record high 1.2mn b/d in November, as independent refiners in Shandong province raced to use up their 2022 import quotas, according to Argus data.

Malley said the US has been in contact with the Chinese authorities on the issue and will continue to take steps to sanction all individuals and entities that are found to be involved in the import of Iranian oil. "The conversations we've had with the Chinese, which go back several months, will be intensified," he said.

The US Treasury Department most recently targeted 13 companies in November registered in China, Hong Kong, the Marshall Islands and the UAE over alleged facilitation of oil trader and contravention of US sanctions.

Malley admitted that the US' sanctions on Iran has been far from "perfect" so far but said the US will "do as much as we can" and "everything in our power to make sure that our sanctions are enforced.

By Nader Itayim

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