TEHRAN - After taking office in August, Minister of Petroleum Javad Owji promised that “good things will happen in the field of selling Iranian oil in the coming months”. Now some 100 days since the inauguration of the new administration, Iran has boosted its oil exports to the extent that credits Owji with having achieved his promise.
Owji ruffled some feathers when he said Iran was strongly determined to increase its oil exports “despite illegal U.S. sanctions”, but the question raised then was: Would Iran overcome the sanctions regime and redeem its traditional title of a major oil producer?
When he attended a private meeting of the Iranian parliament’s economic commission recently, the minister divulged that “our oil sales have improved a lot and we are using various domestic and foreign capabilities in this regard”.
Owji then promised that Iran would also resume exports of its petroleum products, which were used to replenish domestic inventories, and raise its refining capacity by 1.4 million barrels per day.
According to Owji, good things have also happened with regard to oil and gas condensate exports. The recent “childish” incident in the Sea of Oman where U.S. naval forces futilely tried to pirate an Iranian cargo was a reaction to Iran’s achievements in increasing oil and gas condensate exports, he said.
At their discretion, Owji and other officials refrain from releasing details lest this would undermine their plans, but without a doubt, the improvement in oil sales is a positive pulse for Iran’s strategic oil industry and the country’s economy, the continuation of which can help improve various trends.
Gone are the days when the U.S., under then president Donald Trump, pledged to reduce Iran’s oil exports to zero – a wish that has not been fulfilled to date.
Trumpism, however, persists to an extent despite the current U.S. administration’s attestations to the contrary.
Last week, President Joe Biden said in a memo to the U.S. State Department that there were sufficient supplies of petroleum so other countries can reduce what they buy from Iran.
The White House is required to affirm every six months that there is enough oil supply globally to maintain sanctions against Iran that were put in place in 2012, during Barack Obama’s administration.
Biden’s statement came in advance of a virtual Monday meeting with China’s President Xi Jinping, whose country is the largest purchaser of Iranian oil despite the US sanctions.
Before occupying the White House, Biden had repeatedly renounced his predecessor’s policies with regard to Iran. After taking office, however, he has signaled keeping the key elements of the sanctions regime intact as a pressure tool against the Islamic Republic.
Recently, the United States has resorted to stealing Iranian oil cargoes. Iran’s Islamic Revolution Guards Corps (IRGC) said Wednesday that it had prevented a piracy attempt on an Iranian oil cargo traveling in the sea of Oman last month.
Under the secondary U.S. sanctions, Iran’s oil industry, banking, shipping, insurance services and energy sectors are off limits for transactions.
While failing to cripple Iran’s oil industry, the sanctions regime has cut exports and disrupted investment in the sector, but they have also spurred Iran into finding innovative ways to bypass the illegal sanctions.
In September, Owji said that the “tyrannical” U.S. sanctions had deprived Iran of 1.8 billion barrels of oil exports and more than $100 billion of revenues between 2018 and 2021.
They have halved the country’s export capacity and resulted in many lost opportunities, besides weakening Iran’s position in the market; he told the parliament where he outlined his plans for marketing and sales of oil, gas, condensate and petroleum products in April.
Those plans include diversifying the methods of selling oil and oil and gas products; using the capacities of the private sector and other organizations for the sale of crude oil; bartering oil for goods and forging trade ties with strategic customers in Asia, including India and China; extending current gas contracts and finding new markets.
The oil industry is one of the lifelines of the Iranian economy. It accounts for more than 95 percent of the country’s energy supply. Oil proceeds also represent a significant share of Iran’s GDP and economic development. Hence, the sector has turned into a frontline in the ongoing US economic war on the Islamic Republic.
This full-blown war, coupled with chronic structural problems plaguing various sectors of the industry and some inefficient policies of the past administrations, has saddled it with many challenges. Putting the oil industry back on the right track requires surgery in various sectors, the Ministry of Petroleum’s weekly newspaper Mashal wrote in its latest issue.
“There remains no way out of the current situation other than the path of transformation,” it said.
Owji has cited combating corruption as a key cornerstone of his policies. He says his ministry will support domestic manufacturers and knowledge-based companies to move towards reducing costs by strengthening domestic potentials.