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Iran Defies US Sanctions With Surging LPG Exports

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March 4, 2024

By Patrick Sykes (Bloomberg) —

Iran is defying US sanctions with surging exports of liquefied petroleum gas, the latest sign that American pressure is failing to dent the Islamic Republic’s energy sales as its role in funding regional militias comes under scrutiny.

Iran last year became the biggest Middle Eastern supplier of the fuel — which is used for heating, cooking and as a feedstock for chemical plants — with exports surging 28% to over 11 million tons, according to an analysis of ship tracking data and market intelligence by consultancy Facts Global Energy. The firm expects exports to continue climbing beyond 12 million tons this year.

The increase is driven by rising production from the massive South Pars gas field in the Persian Gulf as well as greater shipping capacity between Iran and China, where almost all of the fuel is sent, Iman Nasseri, FGE’s Managing Director for the Middle East, told Bloomberg by phone.

The US is trying to tighten enforcement of sanctions on Iran’s energy trade in order to choke its financial support for allied militias in the region, like the Houthis in Yemen and Hamas in Gaza. Yet tough action risks pushing up prices and hurting consumers, which poses a political problem in an election year.

Despite the US pressure, Iranian oil production has also swelled, rising to a five-year high of over 3 million barrels a day last year. Most of its crude exports also go to China.

© 2024 Bloomberg L.P.

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