Iran oil exports likely to fall to 14-month low next month

Iran oil exports are expected to fall in May to a 14-month low. Reuters photo by Morteza Nikoubazl.

Iran oil exports expected to total 1.7 million b/d in May

Iran oil exports are expected to drop by 100,000 b/d next month, hitting a 14-month low, according to a Reuters source familiar with the country’s tanker loading schedule.

Click here to watch production manager Dave Kuhnert explain how EndurAlloy™ production tubing has cut Crownquest Operating LLC’s Permian Basin well operating costs and extended well run-times.

The fall in exports could be the result of a drop in demand from India and Japan or it could signal that Iran is struggling to boost exports after clearing out crude stocks that were stored on tankers.

The drop in demand from India came about after buyers cut purchases from Iran after Indian state-owned refiners agreed to cut their crude imports from Iran by a fifth in an effort to pressure Tehran to award the Farzad B gas field to an Indian consortium.

The source also said Iran is putting about 3 million barrels back into storage in May, which may reflect the oversupply of crude on the market despite efforts by OPEC to limit output and bump up prices.

Crude oil loadings from Iran are anticipated by reach nearly 1.7 million b/d in May and almost 100,000 b/d will likely be put into storage on tankers.

This month, Iran is expected to export 1.8 million b/d of crude and a little over 370,000 b/d of condensate, a sharp decline from a six-year high of nearly 2.9 million b/d in February for both forms of oil.

In March and April, Iran did not store any crude or condensate.  Iran loaded over 2.6 million b/d of both crude and condensate in March.  The export numbers in March are significantly higher than preliminary numbers reported by Reuters earlier and show Iran took full advantage of its exemption from the OPEC production cuts.

In May, crude liftings for India are expected to be about 370,000 b/d, down about 100,000 b/d of both crude and condensate.  Japan is expected to lift nearly 40,000 b/d, the lowest since March and loadings of crude and condensate for China are expected to be a little over 500,000 b/d, a four-month low.