Iran Eyes Fuel Exports to Regional Neighbors

Iran is eyeing an increase in exports of refined oil products to other countries in the region, even as its crude sales remain severely curtailed by US sanctions. The first of several expected fuel shipments is now heading to Lebanon and Iran's new president says he will prioritize trade with neighboring countries. "I must emphasize that there are many possibilities and grounds for selling oil," President Ebrahim Raisi told a session of parliament on Saturday. The session was also attended by nominees to his proposed cabinet -- including Oil Minister Javad Owji -- who lawmakers are expected to formally approve this week. At the same hearing, Raisi said economic interaction with Iran's neighbors would be a priority of his government, adding that there was an excellent market for exports of goods made in Iran, which could be accessed through deft diplomacy. The leader of Hezbollah, Hassan Nasrallah, said on Sunday that the first vessel carrying Iranian fuel to Lebanon had already sailed, and that it would soon be followed by others. The move has enraged critics of Iran-backed Hezbollah, not least because it risks exposing the stricken Mediterranean country to US sanctions, which apply to Iranian exports of refined products as well as crude. Tanker Trackers confirmed the shipment on Twitter, saying on Monday that it had identified a vessel "carrying Iranian refined petroleum product to Lebanon," without providing details about its location or the size of the cargo. Indirect talks between the US and Iran in Vienna -- aimed at securing Iranian compliance with curbs on its nuclear program in exchange for sanctions relief -- have stalled since the hard-line Raisi was elected as president in June. Afghan Opportunity But US sanctions have failed to prevent Iran from developing its refining capacity, which has grown to around 2.2 million barrels per day, according to former Oil Minister Bijan Zanganeh. Zanganeh said in February of this year that Iran's exports of oil products had reached around 500,000 b/d in 2020 (IOD Feb.23'21). A senior Iranian oil official told Energy Intelligence last week -- before the tanker set sail for Lebanon -- that exports of refined products remain at roughly the same level. US sanctions continue to limit Iran's crude exports to nearly all of its former customers. Even Chinese demand is now in doubt because of low import quotas for the country's so-called teapot refineries (IOD Aug.12'21). And the products tanker heading to Lebanon has not reached its destination yet. But it could prove much harder for Washington to thwart a push by Iran to sell more fuel closer to home, including to Afghanistan, where the Taliban are ignoring US sanctions after sweeping back to power this month. A spokesman for Iran's Oil, Gas and Petrochemical Products Exporters' Union, quoted by Reuters, said on Monday that Iran had restarted exports of gasoline and gasoil to Afghanistan in recent days, at the request of the Taliban, who had cut tariffs on imports of Iranian fuel by up to 70%. Iran exported 398,000 tons of fuel, mostly gasoline, to Afghanistan between May 2020 and May 2021, according to data published by Iranian oil and gas consultancy PetroView, with volumes peaking in February at 173,000 tons -- equivalent to around 50,000 b/d -- before falling back sharply. Simon Martelli, London, and Oliver Klaus, Dubai