18th June 2010 - Iranian Crude Exports
Tensions surrounding the Iranian nuclear development programme have been the common feature of international politics since February 2003, when Tehran revealed its uranium enrichment facilities. These developments have always attracted plenty of attention from the shipping industry due to the importance of Iran in the international crude export markets. In the 1st three months of this year Iranian crude exports averaged 2.1 million b/d. Around 70% of these exports were destined for Asia Pacific customers and some 25% for OECD Europe.
In Asia Pacific, China, Japan, India and South Korea have traditionally been the key buyers of Iranian crude, although their "appetite" has changed over time. China's intake of Iranian crude increased from 0.42 million b/d in 2007 to 0.47 million b/d in 2009, but then dropped to 0.39 million b/d in the 1st quarter of 2010. Despite the latest decline, China remains the single largest buyer of Iranian crude. Japan is the 2nd largest customer of Tehran, although Japanese interest in Iranian crude has been in gradual decline since 2003. Crude shipments dropped from 0.66 million b/d in 2003 to 0.38 million b/d in the 1st three months of this year. India is the 3rd largest importer, with imports preliminary estimated at around 0.35 million b/d in Q1 2010 and below previous levels. The key exemption to this overall falling trend is South Korea, with stable imports of Iranian crude of around 0.20-0.25 million b/d since 2005.
Similar to generally declining trend in Asia Pacific, shipments of Iranian crude to OECD Europe have also been moving downwards over the past four years. In the 1st three months of this year total imports to the region averaged 0.57 million b/d, compared to 0.88 million b/d in 2006. At present, the largest buyers of Iranian crude are Spain and Italy, with imports at 0.13 million b/d into each country. Belgium and Turkey share the second place, with imports at 0.08 million b/d. Other European countries that take small volumes of Iranian crude are Netherlands, Greece, France, Germany and UK.
Going forward, we wait to see what effect, if any, the latest round of international sanctions will have on Iranian crude exports. With the EU announcing its own sanctions aimed at the oil & gas industries, it also will be interesting to see what happens to Iran's main western customers. For NW European buyers the volumes in question are fairly small and easily replaced, but for Italy and Spain there may be more questions; but only time will tell what happens.
