Iranian govt increases oil sales to China despite economic sanctions

INTERNATIONAL DESK: The Iranian government has increased its oil sales to China at a highly discounted price, despite economic sanctions, inflation and widespread social unrest, US-based Voice of America (VOA) reported.

According to VOA, Iran does not publish statistics about its oil sales, but analysts say Tehran has increased oil exports to more than 1.2 million barrels per day over the past three months.

Iranian oil reaches the Chinese market through a camouflaged system of delivery that the Iranian regime has perfected over the past several decades of Western sanctions.

Mahdi Ghodsi, an economist at the Vienna Institute for International Economic Studies, as quoted by VOA, said: “[The] Iranian regime is now very experienced in bypassing sanctions that it is also doing it for Venezuela or even Russia.”

Iran can produce more than 3.5 million barrels of oil per day and is thus among the five largest crude oil producers in the world, according to the U.S. Energy Information Administration.

Iran’s oil production, however, hit a 30-year low in 2020 because of intensified U.S. sanctions as well as the economic impact of the global COVID pandemic.

Exactly how much Tehran makes from its oil and gas exports is not known due to the absence of official data. Estimates vary from USD 15 billion to USD 30 billion annually.

“Iran’s oil revenues fell from USD 100 billion to USD 8 billion a year after the U.S. withdrew from the JCPOA [Joint Comprehensive Plan of Action, also known as the Iran nuclear deal],” said Umud Shokri, an analyst of global energy affairs, according to VOA.

The U.S. left the JCPOA in May 2018.

Iran is the third largest provider of oil to China after Russia and Saudi Arabia. “China is the biggest winner of the Iranian oil embargo,” said Shokri.

For Iran, however, the increase in oil sales is far from a stable solution for its longstanding economic woes. The country has suffered chronic inflation that has pushed millions below the poverty line, according to VOA.

U.S. Special Envoy for Iran Robert Malley has said that the US is aware of the situation and is continuing to monitor oil sales to China.

Al Arabiya Post recently reported that Pakistan plans to buy oil and gas from Iran, but wants it to do it in such a way that it escapes sanctions from the US and other Western countries.

According to Al Arabiya Post, a digital media organization in the Middle East, there is a general view in the Pakistan government that if they can trade oil and gas from Russia, another US-sanctioned country, then there may be no harm in trading the same from Iran. And Iran is also offering a better deal for oil supply. Iran has even offered wheat, meat and rice as payment for the export. (ANI)