Iranian crude flowing to markets

Oil trader Vitol confirmed over the weekend that it had purchased a batch of Iranian crude, with company CEO Ian Taylor commenting to Bloomberg that it was “very much business as normal.”

The news came on the heels of statement by Iranian Minister of Petroleum Bijan Namdar Zangeneh on Saturday, confirming that the country is targeting exports to Europe of 300,000 bopd. Clients include Total, Spanish refining company Compañía Española de Petróleos and Russia’s Lukoil. Fellow Russian company Rosneft and Italy’s Eni will most likely confirm booking of cargoes later this week.

On Friday Swiss traders Glencore loaded 586,400 barrels of oil aboard a tanker at Bandar Mahshahr terminal, thus becoming the first European company to ship Iranian crude.

Vitol expects Iran to add as much as 700,000 bopd to its export volume by year-end 2016. In 2015, the country produced around 2.85 million bopd. While significant, output was far lower than the peaks of more than 4 million bopd seen between 2005 and 2008. In 2013, production had dwindled to 2.5 million bopd, according to data compiled by Bloomberg.