Bloomberg: U.S. and European sanctions designed to pressure Iran over its nuclear program may be cutting the Persian Gulf nation’s oil exports as vessels cancel trips to the country. Bloomberg
By Isaac Arnsdorf
U.S. and European sanctions designed to pressure Iran over its nuclear program may be cutting the Persian Gulf nation’s oil exports as vessels cancel trips to the country.
Shipments have declined by 300,000 to 400,000 barrels a day because sanctions are preventing Iran from selling oil, Amrita Sen, an analyst at Barclays Capital in London, said today by e- mail. Half of the tankers booked to load at the country’s largest terminal last month didn’t complete the voyages, according to brokers, company officials and ship-tracking data.
Ship owners are avoiding trade with Iran because U.S. financial sanctions are blocking payments and the main providers of cover against risks such as oil spills are subject to the European Union’s ban on the purchase, transportation, financing and insurance of Iranian oil. While the EU embargo approved Jan. 23 exempts pre-existing contracts until July, it has already made fewer ships available to carry Iranian crude.
“Iran is finding it increasingly difficult to sell crude, and their production is sliding,” Leo Drollas, chief economist at the London-based Centre for Global Energy Studies, said today by phone. “They are suffering, there’s no doubt.”
Iran, the Organization of Petroleum Exporting Countries’ second-biggest producer, pumped 3.45 million barrels a day last month, the lowest level since September 2002, according to data compiled by Bloomberg. Oil sales earned Iran $73 billion in 2010, accounting for about 50 percent of government revenue and 80 percent of exports, the U.S. Energy Department estimates.
Twenty-two tankers were booked to call at Kharg Island in February, according to brokers including New York-based Poten & Partners Inc. Eleven of the ships failed to load cargoes totaling 1.88 million deadweight tons, or about 13.8 million barrels, according to ship-tracking data and company officials.
Iranian Oil
