Thursday, 17 June 2010

Iran sanctions may result in redirection of oil exports

According to official reports Kazakhstan and Turkmenistan may redirect their oil exports to Russia's Black Sea port of Novorossiisk rather than shipping them to Iran due to the fresh sanctions which include a 'ban on investments, technical assistance and technology transfers to Iran's key oil and gas industry'.

Kazakhstan has been pumping oil to Iran at a rate of 1.2 million tonnes per year. Turkmenistan exports 2 million tonnes per year, but it is unclear how much goes to Iran.

An inside source has said that the Kazakh and Turkmen barrels would be directed through the Baku-Makhachkala-Novorossiisk pipeline originating in the Azeri capital on the shore of the Caspian Sea. Turkmenistan also has the technical ability to switch supplies to the BP-led Baku-Tbilisi-Ceyhan pipeline. The pipeline has a capacity of 5 million tonnes per year but is only pumping at a rate of 3.5 million at the moment.

Iran earns between $55-$60 billion from oil and gas exports and has already felt the impact of the sanctions when earlier this year Russia's second-largest crude oil producer, LUKOIL, stopped gasoline sales to Tehran.

Source: Reuters

For more news and expert analysis please see Caspian Focus and Iran Strategic Focus.

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