Reuters reported on Friday, July 3, citing three Iranian and Western sources, that Iran has begun negotiations to sell oil to Japanese companies.
The sources said that potential Japanese buyers of Iranian oil are seeking a longer exemption from U.S. sanctions and guarantees for safe shipping conditions in the Persian Gulf.
Under its recent memorandum of understanding with the Iranian regime, the United States authorized Iranian oil sales for a period of 60 days. Before this agreement, Iran’s oil exports were subject to U.S. sanctions. Those sanctions prompted many Asian buyers of Iranian oil, including South Korea, India, and Japan, to halt their imports. In recent years, China had been the only major buyer of Iranian oil.
Escalating Iran-US Conflict Cuts Strait of Hormuz Traffic, Lifts Oil Prices
The current U.S. Treasury Department exemption allowing the sale of Iranian crude oil, petrochemicals, and petroleum products remains valid until August 22, and it is still unclear whether it will be extended or allowed to expire.
Reuters said that Japan’s Ministry of Foreign Affairs and the U.S. Treasury Department did not respond to its requests for comment on the report.
Oil exports from the Persian Gulf increased last month
At the same time as the Reuters report, data from several global shipping intelligence firms showed that oil exports from the Persian Gulf increased by more than 3 million barrels per day in June compared with the previous month, reaching more than 10 million barrels per day. However, that figure remains 40% below the average monthly level before the recent war in the Middle East.
Before the recent war involving the United States, Israel, and the Iranian regime, about 16.5 million barrels per day of oil and condensates were exported from the Persian Gulf.
Data from Kpler show that combined exports of crude oil and condensates from Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Iran increased by more than 3.5 million barrels per day in June, reaching 10.07 million barrels per day.
Vortexa, another maritime intelligence company, estimated exports of oil and petroleum products from the Persian Gulf at 10.2 million barrels per day in June.
Reuters said that the United Arab Emirates led the increase in Persian Gulf oil exports by allowing millions of barrels of stranded crude oil in the Persian Gulf to reach international markets, helping reduce oil prices to pre-war levels.
Data from Kpler and Vortexa show that the United Arab Emirates’ exports in June were more than 1 million barrels per day higher than in May.
According to Kpler, Saudi Arabia’s crude oil exports increased by 768,000 barrels per day in June, reaching more than 4.5 million barrels per day.
During the war, Saudi Arabia and the United Arab Emirates routed part of their exports through pipelines that bypass the Strait of Hormuz.
Vortexa’s data showed that exports from Iraq and Kuwait increased to about 800,000 barrels per day.
Vortexa estimated Iran’s oil exports in June at 640,000 barrels per day, representing an increase of more than 70% in the country’s oil exports.
The increase in Middle Eastern oil exports followed the recent memorandum of understanding between Iran and the United States. Under the agreement, Iran has committed to guaranteeing the safe passage of commercial vessels through the Strait of Hormuz for 60 days. In return, the United States lifted its blockade of Iranian ports.
Before the 40-day war, the Strait of Hormuz carried about 20% of the world’s crude oil and liquefied gas consumption. Following its closure by Iran, energy prices surged and a number of countries experienced supply shortages.
