Oil-importing nations bought the most Iranian crude last month since world powers tightened sanctions on the country three years ago, according to the International Energy Agency.
Imports of Iranian crude reached 1.4 million barrels a day in May, up 235,000 a day from April and the highest level since June 2012, the last month before the U.S. and European Union imposed new restrictions on oil trade and financial transactions, the IEA said. The nation pumped 2.85 million barrels a day last month.
“Tehran continues to prepare for the day when international sanctions are lifted,” the Paris-based adviser to 29 countries said in its monthly oil-market report. Iranian fields “are in theory capable of producing as much as 3.4 million to 3.6 million barrels a day within months of sanctions being lifted.”
Iran, once the second-biggest producer in the Organization of Petroleum Exporting Countries, has fallen to fifth place after sanctions curbed output. The Persian Gulf nation and six global powers including the U.S., Russia and China seek to complete by June 30 details of an agreement that would restrict Iran’s nuclear program in exchange for an easing of sanctions. Talks to finalize the deal continued in Vienna this week.
“It is unclear how much, if any, of the May volume came out of floating storage,” the IEA said. Iran had about 10 million barrels sitting in storage on ships, Deputy Oil Minister Roknoddin Javadi said in Kuala Lumpur in May.
China and India have become the largest buyers of Iranian oil since 2012 “and Tehran is expected to target Asia for its additional crude if and when sanctions are lifted,” the IEA report said.