U.S. authorities seized nearly 1 million barrels of Iranian oil that were being illegally smuggled to China earlier this year, reports have emerged. The U.S. seized Greek-owned M/T Suez Rajan with court filings showing allegations from U.S. prosecutors that Iran falsified the vessel's cargo records and obfuscated its location to avoid accurate tracking. The Greek shipper has already agreed to pay a $2.4 million fine.
Iranian crude exports have hit as high as 2mb/d, the highest level since 2018 despite the country still being under U.S. sanctions. Tehran says it has boosted crude output to above 3 million bpd, again the highest since 2018. All that oil from Iran is certainly playing a part in keeping the markets looser than what Saudi Arabia and OPEC might hope for.
Prospects of reviving the Iran nuclear deal have swung dramatically, from near certain in March 2022 to almost nil by the end of the year and somewhere in the middle currently. Although prospects of a deal being signed any time soon appear dim, relations between Washington and Tehran have warmed up considerably, with the Biden administration unblocking frozen assets and possibly even allowing Iran’s enrichment of uranium. The U.S. administration might not openly admit it, but it has opted to look the other way and allowed Iran oil sales to hit record highs--obviously happy to keep markets supplied in a bid to keep oil prices low. Earlier, reports emerged that the U.S. and Iran are making progress after resuming talks on a nuclear deal, a move that could ease sanctions on Iran's oil exports. Israel's Haaretz newspaper reported that the talks are moving forward more rapidly than expected, with the possibility of a deal being struck in a matter of weeks. Deal terms are likely to include Iran ceasing its 60% and higher uranium enrichment activities in return for permission to export as much as 1M bbl/day of oil.
But the latest Bloomberg report claims Iran’s soaring oil exports following secret diplomacy with the U.S. are likely to fall for the rest of the year as demand in Asia wanes with the end of summer
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.