Iran Cheats on Oil Export Caps for Eighth Straight Month

Reuters on Tuesday published figures showing that Iran has, for the eighth straight month, violated crude export restrictions set by the interim Joint Plan of Action (JPA) agreement. Reuters cited experts suggesting that the Obama administration has been deliberately looking the other way as Tehran ignored the caps.

Under the agreement signed in November between Iran and six world powers, which came into effect in January, Iran’s exports should average a maximum 1 million barrels per day (bpd) through to July 20.

Iran’s oil exports were 1.21 million bpd in June, down from 1.33 million bpd in May, one of the Reuters sources said.

“Iran is increasingly emboldened to export its oil,” said Mark Dubowitz of U.S.-based independent think-tank Foundation for Defense of Democracies (FDD).

“The Obama administration already has sent the message that it won’t crack down on Iran’s excess crude oil sales, condensates exports, or its transfer of crude oil to (Syrian President Bashar al-) Assad despite congressional demands,” he added.

The U.S. administration has argued that condensates, a premium-price form of very light oil found at natural gas fields and mostly used to make plastics, do not count as crude oil; and that Iranian gifts of oil to Syria are not “sales” and so also do not count.

“The U.S. authorities appear to have been very tolerant of rising Iranian condensate supplies, which have boosted observed imports of Iranian oil by Asian buyers,” a senior executive at an oil company said.

U.S. Secretary of State John Kerry warned Iran this week it still had to prove its nuclear ambitions were peaceful as the latest round of atomic talks with world powers was due to start in Vienna on Wednesday as the July 20 deadline for an agreement loomed.

In Tehran, Iranian President Hassan Rouhani said in a speech Western sanctions were already crumbling.

The FDD’s Dubowitz summed up, saying: “U.S. negotiators seem so eager for a nuclear deal that they appear willing to steadily loosen the once crippling restrictions on Iran’s oil lifeline even before winning the critical concessions.”