2019 a tough year for Iran’s oil exports

2019 a tough year for Iran’s oil exports
ID : N-4774 Date : 2019/03/22 - 10:00

(Persia Digest) – Iran’s former representative at the Organization of Petroleum Exporting Countries (OPEC) believes: “The US will not revise sanctions on Iranian oil exports because a more than 2 million bpd increase in non-OPEC oil production in 2019 will spare world markets from facing a shortage due to the reduction of exports from Iran.”

The Iranian government has estimated selling 1.5 million bpd of oil in next year’s budget (1398 HS) while Iran is facing a new round of sanctions due to a decision made by [Donald] Trump’s Administration that its final goal is to reduce Iran’s oil exports to zero as of 5 May 2019.

Mohammad-Ali Khatibi, former director of International Relations at the National Iranian Oil Company (NIOC) and a former representative of Iran in OPEC, told Persia Digest (PD): “Based on the Foreign Minister’s statements, Iran’s oil exports have dropped as compared to the pre-JCPOA era. Therefore, I believe it is unlikely that Iran will be able to sell 1.5 million barrels of its oil per day. Under such circumstances, if the US does not extend its oil exemptions for the eight countries, or if it reduces their number, Iran will face a budget deficit unless a positive political transformation occurs or a new sales method is put in place.”


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Asked if the US could stop Iran’s oil exports as of May 5, 2019, he said: “After May 5, it is possible that no exemptions will be extended or the number of countries that have been exempted from oil sanctions will be reduced. 2019 is also a special year for the production of unconventional oil since the production of non-OPEC oil will increase to over 2 million barrels. Therefore, it is unlikely that world oil markets will face any shortages.”

Iran’s former representative to OPEC added: “OPEC’s agreement to reduce 800,000 bpd of its oil production also included the reduction of Iranian and Venezuelan exports. Therefore, OPEC is ready for the fall of Iran’s oil exports. One issue still remains and that is the US-produced oil and Shale oil are light crude oils which should be mixed with heavy and bitter oils in order to be used in refineries; with the continuation of Iran's sanctions, the market may fluctuate slightly, but this will not be effective in increasing the final price of oil.”


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Khatibi said: “The ongoing political situation in Venezuela would be of no help to Iran’s oil exports because Caracas has not much oil exports and the markets for selling its small amount of exports have already been determined. Therefore, in light of these issues, the world will not suffer from oil shortages in 2019 for the United States to lift sanctions on Iran.”

As for offering oil on the stock exchange as an approach to export Iranian oil, he said: “You cannot expect much from the oil bourse. The bourse grows gradually and can only help Iran’s oil exports to the extent that was estimated in next year’s budget e.g. 100,000 bpd.”

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