Iran has lost some customers for its oil because of looming U.S. sanctions, but high prices are making up for the lost sales, Iranian Vice President Eshaq Jahangiri has said.
“While some countries have stopped buying oil from Iran, we have found new partners,” he was quoted as saying by Iran's IRIB broadcaster on October 15.
“America thinks Saudi Arabia can replace this oil. But right now Iran’s oil has reached more than $80 [per barrel], and with half the previous exports we will have the same income as before,” he said.
Jahangiri said some countries that have stopped importing oil from Iran are looking for workarounds that would allow them to continue to import energy from Iran indirectly.
He said the developments show that the United States “will definitely not be able to cut Iran’s oil exports to zero” -- the goal set by U.S. officials -- when sanctions targeting the oil sector go into effect on November 5.
An Iranian oil tanker
But Jahangiri's remarks are indirect acknowledgment that Iran's oil exports have been effectively cut in half from a peak of about 2.5 million barrels a day in April as customers fled in anticipation of the U.S. sanctions.
His comments come amid signs that Iran is scrambling to try to maintain its oil exports, which are declining so fast that the International Monetary Fund last week estimated they had already driven Iran's oil-fueled economy into recession.
News reports and Iranian government documents indicate that Iran has in some cases lowered prices and offered discounts to maintain sales as sanctions loom.
The National Iranian Oil Company announced that Tehran is resurrecting an oil exchange it used to sell oil during a last round of global sanctions four years ago, before most sanctions were lifted under Iran's 2015 nuclear deal in exchange for curbs on Iran's nuclear activities.
The oil exchange is a mechanism that attempts to sidestep the U.S. sanctions, which are being reimposed following the U.S. withdrawal from the nuclear deal, by allowing private companies to buy the crude at auction in Tehran and then resell it privately on the open market.
The Times of Israel reported that Iran also may have reached a deal with Russia last month to take delivery of Iranian crude oil and then refine it and sell it to global buyers, in yet another possible scheme to bypass U.S. sanctions by "laundering" the oil through Russian markets.
Reuters reported on October 15 that oil tankers continued to carry Iranian oil exports to China, India, Turkey, Italy, and a few other destinations earlier this month, one month ahead of the reimposition of oil sanctions.
In the first week of October, Iran's crude exports averaged 1.1 million barrels per day, according to Refinitiv Eikon, an industry source of data on tanker traffic.
While most oil analysts have attributed the sharp rise of premium crude prices since April to over $80 a barrel at least in part to the loss of Iranian exports, the U.S. special envoy for Iran, Brian Hook, told reporters in Paris on October 15 that the market is doing fine with less Iranian oil.
"We are seeing a well-supplied and balanced oil market right now. We should focus on these fundamentals and not be distracted by the emotional and unbalanced claims coming from Tehran," he said.