Iran Denies IEA Oil Storage Estimate

Iranian Minister of Petroleum Rostam Qasemi told reporters on 15 May that Tehran denies an International Energy Agency (IEA) estimate in its latest monthly oil report that Iran has stored 30mn barrels of crude oil offshore in tankers and switched off global marine traffic tracking devices on all but one of its tankers, in an attempt to conceal the actual status of its oil production and exports. “The country’s oil exports have not decreased by 6%” as the IEA claimed, Mr Qasemi said. The IEA estimated that 15-25% of recent Iranian exports had not been dispatched as normal, but stored in tankers. It also estimated Iranian oil production at 3.3mn b/d. On 14 May Mohsen Qamsari, National Iranian Oil Company (NIOC) Director for International Affairs, told Mehr News Agency that Iran’s oil production has remained stable at 3.8mn b/d since January and that none of the 12 new tankers Iran is adding to its national fleet will be used for oil storage (MEES, 23 April).

The EU’s ban on the provision of protection and indemnity (P&I) re-insurance to third party shippers of Iranian crude from 1 July is expected to affect shipments of Iranian crude to Japan and South Korea. Last week the UK pushed its EU partners to freeze the P&I provision of the EU Sanctions Bill, which was not reviewed as originally planned during the 14 May EU foreign ministers’ summit. The review has now been pushed back to 25 June. On 14 May South Korea’s economy ministry officially requested that the EU freezes the re-insurance ban beyond 1 July, observing that the issue was being discussed with the EU “in close cooperation with Japan.” Jae-do Moon, South Korea’s Deputy Economy Minister for International Affairs, said: “It will be hard [for Korea and Japan] to find entities to provide alternative insurance coverage to European P&I.”

Meanwhile, on 15 May India approved a decision to limit imports from Iran by 11% during the current fiscal year. This is expected to reduce India’s imports of Iranian crude from 127.8mn barrels in fiscal year 2011-12 to 113.6mn barrels in 2012-13.

On the EU front, Greece’s planned reduction of Iranian crude imports is “rapidly progressing,” a senior official told MEES, noting that Greece has found alternative supply sources from North Africa and the CIS. As a result Greek dependence has dropped to around 30% of its December 2011 Iranian imports level of almost 400,000 b/d.

© Copyright MEES 2012.