TEHRAN
\nIran faces a potentially crushing loss of oil exports when US sanctions return in November, but the impact could be blunted by its experience of working around embargoes.
\nWhen Iran faced its toughest international sanctions between 2012 and 2015, analysts say it found a number of creative solutions, from repainting and renaming ships to switching off their tracking devices.
\nThose tactics have continued.
\n\u201cWe find those tankers quite often, leaving and entering Iran in a covert fashion with their transponder turned off,\u201d said Samir Madani, co-founder of TankerTrackers.com, which monitors the oil trade.
\n\u201cWe spot them through satellites. I\u2019d say several vessels a month,\u201d he told AFP.
\nAnalysts expect such behaviour to ramp up when US sanctions on Iran\u2019s oil industry return on November 5, following Washington\u2019s withdrawal from the nuclear deal in May. US pressure has already caused a 24 percent drop in Iran\u2019s sales between May and August, according to Bloomberg.
\nThe big surprise has been cuts by Asian buyers, which analysts expected to resist US pressure, notably a 35 percent drop by China and 49 percent by India, according to the Eurasia Group consultancy.
\n\u201cWe underestimated the degree to which New Delhi and Beijing would concede to Washington\u2019s demands,\u201d it said in a briefing note. Eurasia Group said wider geopolitics are at play: India is looking to deepen strategic ties with the US, while China may wish to avoid a fresh spat when it is already embroiled in a bitter trade dispute with Washington.
\nIran was exporting 2.7 million barrels of oil per day in May, but that has already fallen to 2.1 million. Overall, Eurasia Group predicts the country\u2019s sales will fall by a further 0.9 million barrels per day to 1.2 million by November.
\nThat would mean a loss of some $2-2.5 billion (1.7-2.1 billion euros) a month, at current prices. But analysts say Washington\u2019s goal of reducing Iran\u2019s oil sales to zero is unrealistic.
\nIran has the world\u2019s fourth-largest reserves, and many countries \u2014 particularly in Asia \u2014 rely on its supplies and have refineries designed for its particular flavour of heavy crude. And Tehran has many tried and tested ways to keep oil flowing.
\nIt has already increased price discounts since May, worth around $10-15 million a month to large importers like China and India compared with last year, said Wood Mackenzie, a consultancy. \u201cBuyers can pay in kind, trade in other currencies, or extend credit \u2014 even keep the money in an escrow account in Switzerland and wait until these sanctions are over. India had a deal like that last time,\u201d said Madani.
\nIf Iran can get its oil to a friendly port, it could be blended with oil from elsewhere and resold, said Thijs Van de Graaf, assistant professor for international politics at the University of Ghent. \u201cIran played a cat and mouse game last time\u2026 and will probably do so again,\u201d he told AFP.
\nIt also has more aggressive options, with President Hassan Rouhani recently restating an old threat to block the vital Strait of Hormuz through which around a third of the world\u2019s seaborne oil passes every day. Rouhani announced last week that Iran was moving its main oil terminal out of the Gulf to a port in the Oman Sea, so that its tankers would no longer need to pass through the strait, giving it more scope to disrupt supplies.
\nIran says it will not accept major drops in its oil sales, putting pressure particularly on Europe, which was buying more than a fifth of its oil, to resist US demands. The EU strongly opposed Washington\u2019s decision to scrap the nuclear deal and has vowed to introduce a package of measures to protect trade with Iran.
\nBut European firms are highly vulnerable to US sanctions. Shipping, banking and insurance firms have already backed out of Iran and oil purchases are down by 35 percent. \u201cIf we cannot continue (the previous) level of sales even after the European package has been implemented, then that is a red line for us,\u201d warned deputy foreign minister Abbas Araghchi on state television.
\nSupreme leader Ayatollah Ali Khamenei warned recently that Iran would \u201cset aside\u201d the nuclear deal if it was no longer receiving the economic benefits it promised. One slight upside for Iran is that oil prices are already rising due to the squeeze caused by the looming US sanctions.
\nSome analysts predict prices could exceed $100 per barrel, from the current level of around $70. The United States has pressured its ally Saudi Arabia to pump more oil to compensate for the loss of Iranian supplies. \u201cIn theory, it is perfectly possible to have an increased price of oil that entirely compensates for the loss of exports. That\u2019s why the US-Saudi relationship is key here,\u201d said Van der Graaf.<\/p>\n","protected":false},"excerpt":{"rendered":"
TEHRAN Iran faces a potentially crushing loss of oil exports when US sanctions return in November, but the impact could be blunted by its experience of working around embargoes. When Iran faced its toughest international sanctions between 2012 and 2015, analysts say it found a number of creative solutions, from repainting and renaming ships to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-31157","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n