An undated photo showing ship-to-ship oil transfer on high seas to hide real source of illicit cargos

Iran Sells More Oil But With Steep Discounts - WSJ

Thursday, 07/06/2023

Iran is exporting the highest amount of crude oil in five years, although it offers discounts of up to $30 per barrel The Wall Street Journal reported Thursday.

The report confirms estimates that Iran shipped 1.6 million barrels per day in May and June, up from 250,000 barrels in 2019 and 2020, just after the United States imposed full sanctions.

Tehran keeps its export and revenue details as state secret, but the WSJ quoted and Iranian official as saying that it offers deep discounts of up to $30 per barrel. This confirms earlier reports by Iran International that Tehran is selling its oil at half price, and that was one reason why it is facing financial problems, high inflation and an economic crisis.

Iran needs around $50 billion from oil exports to balance its budget, but estimates say actual annual proceeds are around $25 billion.

Another reason for Iran’s oil revenues being probably less than $25 billion is the costs involved in illicit shipments to evade sanctions, and losing money in trying to repatriate the money in hard currencies. Iran’s banking system is also under US sanction and any oil revenues are laundered through intermediaries.

The report also says that a significant part of the increased export volumes goes to Venezuela and Syria, which probably does not generate much profit, as both countries are themselves in financial crisis. Shipments to Syria might even be partly free assistance for Tehran’s war-torn ally.

A former oil official told a Tehran website Thursday that Iran is refurbishing refineries in Venezuela and trying to refine oil there that can be somehow offered in the world market.

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