Iran’s crude exports to its biggest customer, Asia, fell by a quarter in 2012 and shipments this year are expected to drop by at least 12 percent under U.S. sanctions pressure, but ample alternative supplies will keep refiners flush with oil.
Asia’s main oil buyers cut imports from Iran to an average of 1.09 million barrels per day in 2012, government and industry data shows, and planned cuts in term contracts for 2013 point to further reductions of at least 135,000 bpd.
However, experts say overall cuts would have to be deeper to secure further waivers from the U.S. sanctions that are aimed at forcing Iran to halt its nuclear program and which have made shipping and paying for Iranian oil difficult, cutting overall exports by more than half in 2012.
From Asia, Iran lost $14 billion worth of oil exports for the year, according to Reuters calculations.
Exports will remain under pressure this year as well as the United States lobbies Asian countries to further reduce purchases, even though Iranian exports last month rose to their highest since the EU imposed sanctions in July.
An abundance of alternative supplies, mainly from the Middle East, of oil that is of similar quality to what Iran exports and stable prices mean Asian buyers will be able to easily make up for the loss in shipments from Iran.
“Thanks to the efforts of Saudi Arabia, growth of production in Iraq and the United States, I do not expect any major difficulty in terms of meeting global oil demand this year,” said Fatih Birol, chief economist at the International Energy Agency which advises industrialized nations on energy policies.
The drop in Iranian exports “will not affect the market in a negative sense”, he told reporters in Tokyo.
Almost all of Iran’s exports flow to Asia.