FILE PHOTO: Oil tankers pass through the Strait of Hormuz

FILE PHOTO: Oil tankers pass through the Strait of Hormuz, December 21, 2018. REUTERS/Hamad I Mohammed/File Photo

Iran to Start Oil Exports From New Port that Bypasses Strait of Hormuz

Bloomberg
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May 19, 2021

By Arsalan Shahla (Bloomberg) —

Iran said it will soon export oil from a new port that allows it to bypass the Strait of Hormuz, as nuclear talks between Tehran and other world powers show signs of progress.

State-controlled National Iranian Oil Co. will start shipping crude from the Jask terminal on the Gulf of Oman coast next month, according to a statement. NIOC is already pumping oil into a 1,000-kilometer (620-mile) pipeline connecting Jask with the southwestern energy hub of Goreh, Managing Director Masoud Karbasian said.

The pipeline will be officially opened by President Hassan Rouhani in the near future, Karbasian said, without giving a timeframe or stating how much oil will initially be exported.

Iran is under strict U.S. sanctions that effectively bar it from selling oil. Yet it has increased exports this year, often disguising the origin of the shipments. Refiners in China are the main buyers. Some flows get passed off as Malaysian and Omani crude after ship-to-ship transfers.

Most of Iran’s energy exports currently have to be sent through the Strait of Hormuz, a narrow channel and a shipping flashpoint in recent years.

World powers are trying to broker an agreement between Iran and the U.S. to revive a 2015 nuclear accord, which restricted Tehran’s atomic activities in return for sanctions relief. Former U.S. President Donald Trump abandoned the deal in 2018 and imposed tougher penalties on the Islamic Republic, which responded by significantly increasing uranium enrichment.

Abbas Araghchi, Iran’s deputy foreign minister and chief negotiator in Vienna, where talks are being held, said on Wednesday there had been “good progress.”

–With assistance from Golnar Motevalli and Serene Cheong.

© 2021 Bloomberg L.P.

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