Oil-tanker tracking companies estimate Iran's oil exports increased for a third consecutive month in August.
Data company Kepler, which provides tanker tracking services, told RFERL's Radio Farda on September 14 that Iran's unsold oil reserves at on-land facilities decreased by 6 million barrels to 50 million barrels, while Iran's oil reserves on water also decreased to 93 million barrels from 107 million barrels.
At the same time, according to OPEC statistics, Iran's oil production has not increased in recent months. Reports indicate that in the past three months Iran has sold a significant amount of its stored oil reserves to China by offering higher discounts than Russia, thus greatly increasing export volumes.
Reuters reported that Iran offered a discount three times larger than Russia for oil sales to Chinese refineries for August. Iran has offered oil delivery for August at $11 below the price of Brent crude oil, which is $8 less than the price offered by Russia to the Chinese.
Following Russia's military invasion of Ukraine in late February, Russian oil was hit with sanctions by Western countries, forcing it to seek new markets.
To compensate for the drop in demand from traditional markets, Moscow has sought to increase exports to Asia by discounting its crude by about $30 per barrel in Asian markets, which was initially $10 per barrel more than Iran's discount to its Asian customers, especially China, according to Reuters.
The energy-cargo tracking company Vortexa says Iran's oil exports fell from over 1 million barrels per day in January to about 700,000 barrels in May but have rebounded in the past three months.
Iran’s main oil customer is China, and it incurs costs for circumventing sanctions and providing oil discounts to China. The exact amount of these costs is unknown.
Iran's economy has been devastated by years of harsh economic sanctions imposed by Washington after the United States withdrew from a deal with world powers aimed at curbing Tehran's nuclear program. Tehran is now struggling to circumvent sanctions and sell oil.
Before the U.S. sanctions, Iran used to export 2.5 million barrels of crude oil and gas condensate per day.