By bne Tehran bureau
Iran’s Oil Minister Javad Owji denied claims that the Islamic Republic was “giving away” crude oil to its customers with “massive discounts,” after two presidential candidates criticised the outgoing government for “wasting” oil revenues with markdowns, the state news agency IRNA reported on June 23.
Owji told a press conference in Tehran that the discounts on Iran’s oil sales under the current government had been 'way less' than its predecessor in the Rouhani administration.
In November, Iran had knocked $13 off the price of each barrel of oil exported to its main client, China, last year, Reuters reported at the time.
According to oil tanker tracking companies Vortexa and TankerTrackers.com, Iran exported 1.3mn barrels of crude oil and gas condensate per day last year, on top of over 220,000 barrels of heavy fuel oil, or mazut.
The Organisation of the Petroleum Exporting Countries (OPEC) put the price of Iranian oil exports last year, excluding discounts and sanctions-busting costs, at over $83. This means Iran should have made at least $46bn from exports of crude oil, gas condensate, and fuel oil. However, according to the Iranian Customs Administration, the actual figure was $36bn.
It suggests that Iran's oil revenues took a hit of almost 22% due to discounts and costs it paid to offset sanctions imposed by the US in 2018.
During the ongoing election campaign for president, Masoud Pezeshkian and Mohammad Bagher Qalibaf took aim at the current situation, alluding to the sanctions, heavy discounts, and revenues lost as a result of Iran's oil exports.
“The current government has been able to increase oil sales by using innovative methods such as utilizing the capacity of overseas refineries,” Owji said.
“We did not sell oil at massive discounts under this government, and I refute the recent claims made about this,” he added.
While oil tanker tracking companies say over 90% of Iran's oil goes to China, with the rest arriving in Syria, Owji insisted that Iran had “15 oil customers” on the books.
He also claimed that “many refineries” belonging to Iran's oil customers had gone to great lengths to modify their processing systems to be able to use Iranian crude oil.
The minister kept quiet about which countries, other than China and Syria, buy oil from Iran.
Owji further added the country's daily crude oil production had ramped up to 3.6mn barrels, although OPEC and International Energy Agency data put the figure at around 3.3mn barrels per day (bpd).
He added that the next Iranian government could “easily continue oil sales” on a “new groundwork” laid by his ministry. “No one can hinder Iranian oil flow,” he stressed.
Last week, Owji gave assurances that Iran would continue to export its crude oil regardless of who becomes the next US president amid concerns that Donald Trump would choke off the trade again if re-elected president on November 5.
The former American president and potential next walked out of the so-called Iran nuclear deal in 2018 three years after Iran and world powers arrived at an agreement that curbed Tehran’s atomic activities in return for the lifting of sanctions.
The Republican president restored and reinforced sanctions, including bans on Iran’s oil exports, which pushed them from 2.5mn bpd in 2018 to a low of 200,000 bpd in 2020.
