LONDON: Iran's crude oil exports have risen in April following softer sales last month, helped by a framework nuclear agreement between Tehran and world powers and the possibility that Western sanctions could be lifted soon.
Iran, once OPEC's second-largest producer after Saudi Arabia, hopes to boost crude exports by as much as 1 million barrels per day (bpd) if Tehran and six major powers finalise a nuclear agreement by a June 30 deadline.
The sides reached a framework accord on March 31. One source, who tracks tanker movements, said Iran's crude oil exports have risen by around 500,000 bpd in April to 1.18 million bpd, helped by firmer sales to India, which bought no Iranian crude last month. "It's the exports to Japan and India, which have meant slightly higher Iranian exports in April even though China took slightly less," the source said. Last month, India halted oil imports from Iran for the first time in at least a decade as New Delhi responded to US pressure to keep its shipments from Tehran within sanction limits ahead of the negotiations on a preliminary nuclear deal.
The source said India, Iran's second-largest client after China, was estimated to have bought four cargoes of crude in April totalling around 4.7 million barrels. Japan was estimated to have bought three cargoes in April, rising from two shipments in March.
A second tanker-tracking source said Iran's exports in April rose by 450,000 bpd from March's unusually low level, towards 1.3 million bpd.
"The 'agreed framework' has already led to an increase in Iranian oil exports as buyers take advantage of a more lax sanctions enforcement environment," said Mark Dubowitz of Foundation for Defense of Democracies (FDD), a US-based think tank.
"While sanctions are still in effect and most major banks are not active, there is nevertheless already a tacit acceptance that oil exports from Iran will pick up," said Dubowitz of the FDD, which advocates maintaining economic sanctions to enforce any nuclear deal with Iran.
Under an earlier interim agreement signed in November 2013, which has been rolled over and is due to expire on June 30, Iran's exports should average 1 million bpd through to that date. Nevertheless, since 2013 exports have frequently been above that level.
Iran says an increase of its oil production will not cause a price crash and expects other OPEC members to make way for extra barrels.
However, so far there is no sign of willingness among other OPEC members to cut supply. OPEC meets on June 5.
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