Further blow to Iranian economy as US sanctions bite
UPDATE 1045 GMT: The Supreme Leader’s top aide, Ali Akbar Velayati, is claiming an oil lifeline after talks with Russian officials and a meeting with President Vladimir Putin in Moscow:
A major Russian #oil company has signed an agreement with #Iran worth of $4B which will soon be implemented. Gazprom & Rosneft are in talks for a $10B agreement, said adviser to Iran’s leader Velayati.#Russia
— Abas Aslani (@AbasAslani) July 12, 2018
Velayati is in Russia for discussions around the US withdrawal from the July 2015 nuclear agreement and the Syrian crisis.
As expanding US sanctions threaten Iran’s economy, India’s imports of Iranian oil fell 15.9% in June.
According to shipping and industry data, India imported 592,800 barrels per day compared to 705,200 bpd in May.
India has been Iran’s second-largest customer after China, but officials have asked private refiners to look for alternative supplies of crude. Two of the country’s largest refiners, Reliance Industries aThreatened at Home, Iran’s President Rouhani Takes Harder Linend Russian-owned Nayara, have already said they will draw down their purchases.
June’s drop was partially off-set by state refiners, which took in about 10% more in June.
State refiners had cut imports in 2017-18 because of a dispute over development rights for an Iranian natural gas field. After Iran offered free shipping and an extended credit period of 60 days, the refiners planned for an increase in imports from the start of the fiscal year in April.
Iran is facing a fall of up to 40% in its oil exports from the level of 2.5 million bpd before Donald Trump announced on May 8 that the US was withdrawing from the July 2015 nuclear deal. US agencies threatened punishment of any foreign firm with American ties that continued business with Tehran after November 4.
Shippers and insurers began cuts in their transport of Iranian oil. Meanwhile, OPEC and Russia announced last month that production will be raised up to 1 million bpd, which would cover the fall in Iran’s sales.
In the first half of June, Iran’s exports fell 16% to 2.1 million barrels per day. As well as India, South Korea and Japan have indicated that they are cutting purchases, leaving China and Turkey as the two countries maintaining import levels.
In the face of the threat, the reactions from Iranian officials have ranged from a denial of any export decline to the declaration that exports and investment can be supported by a private market in which Iranians purchase bonds.