Iran has started sending oil to a new terminal on the Sea of Oman through a pipeline that bypasses the Strait of Hormuz, Chief Executive of the National Iranian Oil Company Mehdi Karbasian says.
The Goureh-Jask oil pipeline is about to carry 1 million barrels per day (bpd) of crude from Iran's West Karun oil fields to the southeastern coast on the Sea of Oman, shifting a major part of Iran's exports from the Kharg Island terminal in the Persian Gulf.
"The national plan to transfer Goureh crude oil to Jask is the largest project in the oil industry," Karbasian said on Wednesday, quoted by Ministry of Petroleum's Shana news outlet.
To reach Kharg Island, oil tankers have to navigate the Strait of Hormuz, a busy passageway into the Persian Gulf which slows deliveries by several days.
The Goureh-Jask pipeline has strategic significance, which creates a new capacity for storage and export of 1 million bpd of crude oil through the new terminal.
Karbasian said after the oil reaches Jask in less than a month, the new "national plan" will be officially inaugurated in a ceremony attended by President Hassan Rouhani.
The official hailed "the national resolve in implementing this great and strategic project", saying production of transmission valves, electric pumps, construction of 1,000 km of oil pipeline along with the construction of reserves, terminals and floating balls had all been carried out by domestic companies.
On Monday, Minister of Petroleum Bijan Zanganeh said the first oil consignment from the Jask terminal will be exported in the Iranian month of Khordad (May 22-June 21). The construction of the $1.1 billion conduit began in June 2020.
Iran currently relies on Kharg Island for more than 90 percent of its crude shipments and on smaller terminals of Lavan, Sirri and Soroush, while its condensate exports are handled by the Assaluyeh terminal, all of which are located in the Persian Gulf.
Kharg Island, which lies about 180 kilometres southeast of Iraq and 50 km from the Iranian mainland, was the main target of Iraqi aerial bombings during the 1980s war of former dictator Saddam Hussein on Iran.
Saddam's initiation of the "tanker war" also provided a pretext for the US to deploy warships to the Persian Gulf in 1995 and base its fifth naval fleet in Bahrain across from the Iranian coast.
The US military presence is a constant cause of insecurity in the strategic waters, where Iranian patrol boats and American warships have squared up several times, threatening shipments through the Strait of Hormuz, the passageway for a fifth of the world's oil or about 18 million bpd.
US warships in the Strait of Hormuz and the Persian Gulf have been confronted by Iranian military vessels three times over the past month after their harassment of commercial ships.
The opening of the Jask terminal comes as the Islamic Republic is preparing to boost production and exports of crude oil which fell after the former Trump administration withdrew from the Iran nuclear deal and reimposed sanctions on the country.
President Joe Biden has said he wants to return the US to the deal, but Washington's reluctance to remove all sanctions imposed under Trump has complicated ongoing talks in Vienna to revive the agreement.
Officials have said Iran could bolster its crude and condensate exports to 2.5 million barrels per day once the US restrictions are removed.
The country is already exporting hundreds of thousands of barrels – a trend which continued all through the Trump administration even though it pledged to bring Iran's oil exports down to zero.
'Spectacular failure' of sanctions
The oil exports rose over the past year, and sharply increased last winter after the November elections, dealing a blow to the unilateral sanctions which irritated American allies in Europe and gave China and Russia even more reason to distrust the US.
The fact that some exports are continuing points to what Senator Christopher S. Murphy called “a policy cataclysm” that demonstrated the sanctions’ weakness, the New York Times reported on Tuesday.
“Trump imposed sanctions and our partners, instead of following America’s lead, effectively took the Iranian side — even helping Iran work around our sanctions,” Murphy said last week at a Middle East Institute forum.
“Trump’s maximum pressure campaign was a spectacular failure,” Murphy said.
The Times quoted a State Department official as saying that the United States has been challenged to enforce the sanctions without reliable help from allies and as traders play a “cat-and-mouse game” to avoid being tracked on the high seas.
When the Trump administration declared it had reimposed international sanctions against Iran that the United Nations Security Council refused to recognize, its allies also balked at the idea and dealt an unprecedented humiliating defeat to Washington on the council.
“If the United States tries to use sanctions for everything, and tries to tell the rest of the world what it can and can’t do, at some point other countries could well push back and say, ‘We’ve had enough of this,’” Corinne A. Goldstein, a sanctions expert and senior counsel at the law firm Covington & Burling, told the Times. “So I think the United States risks losing the power of sanctions by abusing their use.”
European, Indian refineries ready for Iran imports
On Wednesday, Reuters said Indian and European refiners are re-evaluating their crude purchases to make room for Iranian oil in the second half of this year.
Before Trump abandoned the nuclear deal, Europe and Turkey used to lift close to 500,000 bpd of Iranian oil, while India was buying as much as 480,000 bpd.
According to Reuters, at least one European refiner has held in-depth discussions with Iran's NIOC on resuming purchases and Indian refiners say they plan to reduce spot purchases to make way for Iranian contract barrels.
Several Indian state refiners, whose refineries are suited to the high sulfur distillate-rich Iranian crude, have committed to buying Iranian oil once sanctions are lifted, the news agency said.