Iran’s exports of crude oil have soared to a 20-month high, surpassing the 1 million barrel-per-day cap set by the West in an arrangement meant to check the country’s nuclear ambitions.
The International Energy Agency released its monthly report, in which February’s world crude shipments from Iran stood at 1.65 million barrels per day, after being readjusted upwards by 240,000. The latest figures are the highest for the country since June 2012.
According to Reuters, Iran and six world powers under the umbrella of P5+1 came into an agreement that would take effect on January 20 through July 20, which restricted Iran’s crude exports to an average of 1 million barrels per day.
Economic sanctions on Iran over the past two years have reduced the country’s crude exports by about a half.
“Imports of Iranian oil are running well above 2013 levels for the third consecutive month,” the IEA report read.
“The question is whether they are going to continue to test the sanctions,” Antoine Halff of IEA’s oil industry and markets arms said.
Japanese bought less oil from Iran, with its daily imports revised downward to 103,000 barrels.
China’s crude imports from Iran contributed to the February surge, accounting for 168,000 bpd as India bought 93,000 bpd. South Korea accounted for 83,000 bpd.
But the Obama administration anticipates that oil imports from Iran will drop in the coming months to the per-day average of 1 million barrels and stay there over the 6-month period, as Times of Israel Reports.
State Department spokeswoman Jen Psaki told reporters that several factors have made Iranian oil exports seem high, including deliveries to Syria, export of condensates that are not restricted by sanctions and increased winter demand.
The US government believes that Iran cannot sell oil to Syria, but is instead delivering the commodity to the war torn country for free, thereby not benefiting its economy. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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