News : Economy
- Published: Tuesday, 22 July 2014
By Iran News Update Staff
Bloomberg reports that Iranian oil exports are holding steady near their highest level in two years. Specifically, counting both regular crude and condensates together, the average exports for the first six months of the year come to 1.27 million barrels per day. This figure is important because it is well in excess of the one million barrels per day permitted under the Joint Plan of Action. However, that restriction was apparently only imposed on regular crude.
And while it’s not even clear that Iran has remained within the limits in just that domain, the generous means of calculating export figures is indicative of the Obama administration’s effort to make it relatively easy for Iran to meet (or appear to meet) its obligations. In fact, Bloomberg quotes Robin Mills, an analyst at Manaar Energy Consulting & Project Management as saying, “Iran’s going to want oil exports to keep edging up, and the U.S. has been willing to allow some wiggle room.”
Even that wiggle room may not give the impression of Iranian compliance for much longer, though. In the second half of the year, spanning the extended negotiations, Iran’s crude and condensate exports are expected to increase to 1.5 million barrels per day. This is thanks almost exclusively to six large trading partners, and mostly to China, which imported nearly 50 percent more Iranian oil in the first half of this year than in the first half of last year, according to Trade Arabia.
The unanticipated growth of the Iranian oil industry is a problem because it makes the Iranian market more attractive for investors from European countries as well, making it more difficult to enforce international sanctions. Iran is certainly aware of the potential benefit, and the Brookings Institution points out that Valiollah Afkhami-Rad, the head of the Trade Promotion Organization of Iran, recently made reference to “a marathon of European countries that want to trade with Iran.”