The Financial Times (FT) reported that Saudi Arabia has taken steps to slow Iran’s efforts at increasing oil exports, banning vessels that transport Iranian crude from entering their waters, according to traders and shipbrokers.
Iranian vessels carrying the country’s crude are restricted from entering ports in Saudi Arabia and Bahrain, according to a circular sent by a shipping insurance company to its members in February.
Iranian oil executives have expressed their concern about the message circulating in the market, saying it is only adding to problems they face in selling their crude, cited the FT.
Before western sanctions Iran used to send oil by the SUMED pipeline across Egypt, allowing oil to move from the Red Sea to the Mediterranean Sea, wrote Oil Price. The FT says that Saudi Arabia is also blocking Iran from access to the pipeline, which would ease oil exports to Europe.
Since the lifting of sanctions, Iran has managed to sell only small volumes of crude to Europe, including barrels to Spain’s Cepsa, Total of France and Russia’s Litasco. By mid-April, only about eight tankers will have sailed from Iran’s Kharg Island for Europe, said shipbrokers, with only 12m barrels booked to sail.
Iran already faces insurance, financing and legal obstacles despite the lifting of sanctions linked to its oil industry in January.
Following a recent announcement by Saudi Deputy Crown Prince Mohammed bin Salman, in an interview with Bloomberg, stressing that Riyadh will only join the freeze curb if Iran and all other OPEC member nations joined, Iran’s Oil Minister Bijan Zangadeh made it clear that the country rejects Saudi demands. Iranian Oil Minister further insisted that the Islamic Republic would continue ramping up production at will. According to ETF Daily News analysis, the ongoing dispute seems to renders the upcoming April 17th Doha meeting meaningless.
OPEC secondary sources put Iran’s current output at 2.93mb/d, as Al Arabiya informed.