Iran curbed gasoline exports in Rohani's final months

Iran's gasoline exports almost ground to a halt in July and August after the outgoing government ordered storage tanks to be filled at all distribution and export terminals, market sources told Argus .

Consultancy FGE puts exports at just 10,000 b/d in July and perhaps as low as 8,000 b/d in August. The flows slowed by order of Iran's oil ministry, except for some small cargoes or land exports. Iran exported 167,000 b/d in the first half of 2021.

The order to build up and maximise inventories was probably made to emphasize the Hassan Rohani administration's success in making the switch from net gasoline importer to net exporter, market sources said. Rohani was succeeded as president by Ebrahim Raisi on 5 August .

Rohani came to power in 2013, when Iran had major gasoline shortages caused largely to US, EU and UN sanctions that stifled Tehran's ability to secure imports to bridge a domestic supply gap. In September 2013, Iran produced around 400,000 b/d of gasoline, around 85-90pc of its requirements .

That situation has flipped. During the Rohani years Iran invested heavily in building up its production capacity to make it not only self-sufficient but also a net gasoline exporter in early 2019 . This was a major milestone that made it easier for Tehran to navigate the sanctions that the US reimposed in May 2018 . Iran's gasoline exports have been on an upward trend ever since.

Sense of pride It may have been down to "a sense of pride to have not only turned the country during [Rohani's] term from gasoline importer to exporter, but also to be giving the country back with full tanks after having received it with empty tanks," said FGE managing director for the Middle East Iman Nasseri.

But this reduction in exports is unlikely to continue for much longer, with exports likely to ramp up again once the Raisi administration settles in.

Iran could recover to an average 124,000 b/d in the fourth quarter, FGE estimates, if the US sanctions on Iran remain in place. These restrictions could lift if Washington and Tehran reach an agreement on a mutual return to the 2015 nuclear deal, otherwise known as the Joint Comprehensive Plan of Action (JCPOA). Talks resumed in Vienna in April and lasted until mid-June, when they were shelved after Raisi's election.

Mohammad Javad Zarif, Iran's foreign minister under Rohani, said in July that the talks would resume soon after the new administration took office. But Zarif's successor, Hossein Amir-Abdollahian yesterday hinted that Tehran's return to the negotiations could still be months away .

Should sanctions be lifted, Iran's gasoline exports could jump by anywhere between 10-20pc in the months that follow. Beyond that Iran does not have much more to sell.

By Ieva Paldaviciute

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