Iran sold some 1.1 million barrels of oil to European countries last May, close to the amount it supplied before international sanctions were imposed on Iran over its nuclear program. The sanctions were lifted in January 2016 under a nuclear deal Iran signed with six world powers in 2015.
After sanctions were enforced, many European buyers of Iran's oil were forced to get their oil from other sources than Iran. Due to the sanctions, Iran's oil exports fell below 2 mb/d in March 2012. Greece totally cut its oil imports from Iran in April 2012. Spain slashed its purchase from Iran by 31% through December 2011 to January 2012 and instead raised its oil imports from Iraq and Nigeria.
Turkey, which used to buy one-third of its oil needs from Iran, cut its imports by 20%. Iran's oil supply to France and Italy was also halted completely.
2015, Efforts Begin to Regain Share
After these sanctions were imposed, Asian buyers were still continuing their cooperation with Iran, but Japan and South Korea cut their purchase and had to get their oil from other producers. Iran's share of oil market declined and Saudi Arabia grabbed Iran's share.
But the signature of Iran's nuclear agreement with world powers, dubbed the Joint Comprehensive Plan of Action (JCPOA), reversed this trend. Iran decided to get its share of oil market back and it focused on oil production hike. The International Energy Agency (IEA) announced in 2016 that Iran's oil production had reached the pre-sanctions levels of 3.56 mb/d, the figure Iran had last recorded in November 2011.
Long time Asian buyers once more decided to increase their oil purchase from Iran. China was still a big buyer of Iran's oil. European buyers once more turned back quietly to their traditional supplier. These European countries used to purchase 600,000 b/d of oil from Iran pre-sanctions.
According to a report released by UK-based global shipping consultancy VesselsValue, seaborne demand for Iranian crude has more than doubled after the lifting of the sanctions.
In the past five years, the greatest demand for Iranian crude came from China, Japan and South Korea, respectively, it said.
"New players in the mix following the removal of sanctions include France with 21 shipments in 2016, while Italy took 15 shipments, Greece fourteen and Spain thirteen shipments," added VesselsValue.
Exports to Europe at 290,000 b/d
Iran exported on average 290,000 b/d of oil to European countries in 2016, figures released by Middle East Economic Survey (MEES) show.
Iran's oil exports to Europe was valued at $4.57 billion in 2016, $812 million of which was achieved due to exports and oil price hike in December.
In that year, Iran was the 9th largest supplier of oil to Europe. In 2011 when the sanctions had not been toughened, Iran sold $23.5 billion of oil to Europe. At that time, oil prices were above $100 a barrel, while Iran faced no restrictions for the delivery of oil to these countries. In 2011, Iran was selling on average 598,000 b/d of oil to Europe.
In December 2016, Iran's oil sales to Europe topped 550,900 b/d, 50,000 b/d below the pre-sanctions level. In that month, Iran supplied 5.3% of Europe's oil needs and was the 6th biggest supplier to this continent.
Meanwhile, preliminary figures for 2017 are also indicative of the upward trend in oil exports to Europe. In 2016, Spain had purchased on average 49,900 b/d of oil from Iran, but it raised its imports from Iran to 91,000 b/d in January this year. Italian customers, whose average oil purchase from Iran was at 47,300 b/d in 2016, more than trebled their purchase in January to 151,000 b/d. Furthermore, Italy, Spain, France and Greece are among top European buyers of Iran's oil. In 2016, France purchased 88,900 b/d of oil and Greece 59,200 b/d of oil from Iran. Except for these four major buyers, other European countries have also been targeted by Iran's oil as Tehran seeks new markets in Europe. For instance, Belgium has been buying 15,000 b/d of oil from Iran; however, its import from Iran has experienced heavy fluctuations.
300% Growth in 2 Years
Iran's oil exports to Europe reached post-sanctions highs last May. It reached a level nearly equal to imports by Asian customers.
In that month, Iran was exporting around 1.1 mb/d of oil to European countries, very close to 1.2 mb/d it exported in the pre-sanctions era.
These figures also show that Iran's oil exports to European countries have grown 300% over the past two years.