Iran exports firm in 1H April ahead of US waiver expiry

Iranian crude and condensate loadings held firm in the first half of April, as buyers locked in supplies covered by waivers from US commercial sanctions against Tehran that expire on 3 May.

Iranian liquids loadings averaged 1.6mn b/d in 1-15 April, down by 13pc from the revised March number, according to preliminary Argus tracking data. The figure includes volumes that likely loaded on Iran's state-owned NITC fleet tankers, which broadcast no position signals after entering the Mideast Gulf.

These are some of the last purchases made under the 180-day White House exemptions from US sanctions issued to eight countries — China, Japan, South Korea, India, Turkey, Taiwan, Greece and Italy. Buyers from the latter three countries never resumed Iranian shipments because of shipping and financial constrictions.

The US is due to decide whether it will extend any of its waivers prior to their expiry at the start of next month. The White House has previously pledged it will reduce Iranian exports to zero, but recent tightness in global sour crude supplies and oil price hikes could get in the way of reaching that goal.

At least 2mn bl (133,000 b/d) of the first-half April supplies comprised Iranian condensate loaded from Assaluyeh. South Korea, which is only waived to purchase condensate, has been the primary buyer of these volumes in recent months. It took at least 452,000 b/d of condensate in March.

Around 733,000 b/d of Iranian crude that sailed over 1-15 April is now aboard tankers that have yet to signal a final destination. Some 4mn bl — or 266,000 b/d — of Iranian crude is bound for China, compared with 613,000 b/d in full-month March. First-half April sailings of Iranian crude to India picked up to 333,000 b/d, higher from 258,000 b/d last month. Deliveries to Turkey were so far little changed, with 133,000 b/d departing in 1-15 April, compared with 129,000 b/d in full-month March.

Export levels could drop off in the second half of the month. Buyers will likely want to have lifted and processed their crude within the lifespan of their waiver, in order to avoid contravening US sanctions, market participants said.

In this scenario, most buyers — barring India, where deliveries from Kharg Island to the west coast of the country can take as little as four days — will want to have loaded their supplies in the first two weeks of April.

Some refiners could load until the last minute. Prior to the November onset of US sanctions last year, around 29mn bl of Iranian liquids sailed over 1-15 October, with 23mn bl departing Iranian ports in the second half of the same month.

Iran's state-owned NIOC has been setting its formula prices competitively against rival Mideast Gulf producers to encourage shipments over the last few months. The firm put its formula price for April-loading Iranian Light at the widest discount to similar Arab Light and Arab Medium offerings from Saudi Aramco in 20 years. NIOC also offers the NITC fleet for shipments, although traders said some European banks stipulate they are only open to financing Iranian crude purchases if they are not delivered on Iranian ships.