Before the Coronavirus epidemic was a thing, Iran was exporting atleast 700,000 bpd, maybe 1 million or slightly more. What you see on paper is one thing and what countries and traders do behind closed doors is another. Of course the grey market / black market has a limit, but when prices were at $50/$60 a barrel, Iran could entice buyers with steep discounts.
Now after the Coronavirus, if you think about it logically, the number should obviously be much lower but like I said various countries are probably hording as much cheap oil as possible at the moment. At these prices I'm guessing that China, among others are building storage facilities just to store more and more cheap oil. It makes sense since at these prices, what are you going to lose ? The issue is that at these prices, eventually storage facilities will be full and with prices being so low, like today $10 per barrel for WTI, at the end of the day the oil does cost money to produce and how much lower can Iran go ? Let's say it costs Iran $5-$8 per barrel to produce, then realistically what price can Iran offer consumers in order to convince them to take the risk of dealing with them ? I mean yes Brent Crude is still 19.22 and I'm pretty sure Iran bases its oil price on Brent, but still.
Now after the Coronavirus, if you think about it logically, the number should obviously be much lower but like I said various countries are probably hording as much cheap oil as possible at the moment. At these prices I'm guessing that China, among others are building storage facilities just to store more and more cheap oil. It makes sense since at these prices, what are you going to lose ? The issue is that at these prices, eventually storage facilities will be full and with prices being so low, like today $10 per barrel for WTI, at the end of the day the oil does cost money to produce and how much lower can Iran go ? Let's say it costs Iran $5-$8 per barrel to produce, then realistically what price can Iran offer consumers in order to convince them to take the risk of dealing with them ? I mean yes Brent Crude is still 19.22 and I'm pretty sure Iran bases its oil price on Brent, but still.
Well, yeah. I said that Iran produces more than 2.5 million barrels per day to correct what you had said about Iran producing 700,000 bpds.
Anyway, you can't say that because at some point in recent years Iran allegedly exported 1.2 million bpds to China then it has to be the same this year. Our oil production is decreasing as you quoted from Radio Farda. Bijan Zanganeh has confirmed that our oil production is decreasing. We produced almost 5 million barrels per day before Trump reimposed US unilateral sanctions. Now we are producing fewer than 3 million barrels per day. And our oil consumption differs season by season and year by year. For example, after the gasoline reform plan in October, our gas consumption decreased and obviously that affects our local oil consumption as well.
And selling oil on the land is too difficult. Oil tankers can carry millions of barrels safely. What kind of container trucks do you want to use that can handle anything like that? How many of them do you need? I don't think it's feasible. Maybe 50,000 barrels per day can be sold like that, but not hundreds of thousands of barrels.
Selling 2 million barrels per day is completely impossible even before covid-19, considering our capacities and our local consumption. Japan, South Korea, all European countries (Italy, Spain, Greece, etc.), Singapore, Malaysia, even India and Turkey have stopped buying Iranian crude oil. Most Chinese refineries have switched to Saudi Arabian oil and Iranian oil is not their top priority anymore. Even 700,000 barrels per day is too optimistic. The real number is probably between 200,000 to 500,000. But as I said, nobody knows for sure.