IEA: Iran’s Oil Exports Fall 40%

The International Energy Agency reported Iran’s oil exports have fallen approximately 40% since the start of the year, from 2.5 million barrels a day to 1.5 million barrels per day, as a result of sanctions (Chicago Tribune 6/13). Reuters estimates Iran has lost $35 billion in oil revenue this year due to sanctions and falling oil prices (Reuters 6/13).
The International Energy Agency “expects Iran’s exports to fall by another third,” creating “major upside risk for oil prices” (Reuters 6/13).
Iran Stockpiling Excess Oil
The International Energy Agency reports about 17 supertankers and seven Suezmaxes are holding crude “while another estimated 25 million barrels are being kept in onshore tanks,” citing information from unnamed shipping analysts (Bloomberg (6/13). Iranian production has yet to slow to meet lower export levels, causing Iran to stockpile the surplus (Reuters UK 6/13/12). Persian news sources claim that new storage facilities will be constructed to handle the surplus (Bernama 6/13).
Preparations for Moscow Talks
Former IAEA deputy director general Pierre Goldschmidt has proposed offering Iran a “grace period” to disclose details of any past nuclear weaponization activities to the IAEA to lay the groundwork for enhanced cooperation with the IAEA (Al-Monitor 6/13). “Without such a grace period, it is unlikely that Iran would fully cooperate with the IAEA or voluntarily declare any past violations,” Goldschmidt wrote.

Iran’s foreign minister, Ali Akbar Salehi, said he is “optimistic about the final outcome” of next week’s talks (Reuters 6/13). During an interview in Tehran with Russian Foreign Minister Sergei Lavrov, Jalili added, “This is a complex issue and we need to be patient but we’re on the right track”. Meanwhile Iran’s top negotiator told the Iranian parliament that Iran was going ahead with talks in Moscow because Catherine Ashton had “agreed that Iran’s five-point proposal is on the agenda for the Moscow discussions, even non-nuclear issues” (Washington Post 6/13).
Oil Trade Insurance
Iranian news sources claim that Iran’s biggest tanker operator, NITC, has secured $1 billion in insurance cover to serve Asian clients, despite US and EU attempts to prevent shipping firms associated with Iran from acquiring such “vital insurance cover” (Reuters 6/12; Insurance Journal 6/13).  Recently passed US legislation targets shipping companies, like the NITC and National Iranian Oil Co., and allows sanctions to be extended to them, if they are found to be “an agent or affiliate of the Revolutionary Guards” (Reuters 6/12).
Analysis: “Europe’s Unique Opportunity to Act”- Trita Parsi and Reza Marashi

Delaying the sanctions will not ease pressure on Iran. According to renowned Iranian economist Bijan Khajehpour, 85 percent of the embargo is already in effect. Delaying its formal imposition will not cause buyers to return to the Iranian market. All it will do is to provide the West with an ability to use the oil embargo as the bargaining tool it was supposed to be — and exchange it for tangible, verifiable Iranian nuclear concessions.
If the embargo is formally imposed, however, it will become more difficult and costly to lift it and it will serve as naked escalation that will beget Iranian escalation rather than concessions. The risk of war will increase and the threat of an Israeli strike may materialize. (Huffington Post 6/12).