Tashkent Eyes Iran Oil Import, Mulls Transport Options

Oil Minister Bijan Namdar Zanganeh made the statement in a meeting in Tehran on Tuesday with Uzbek Foreign Minister Abdulaziz Kamilov, Shana, the Oil Ministry's news agency, reported.

"Tashkent's limited oil resources constrain the country from extracting as much crude as it needs, so it requires to import the strategic fuel," Financial Tribune quoted Zanganeh as saying.

Pointing to Uzbekistan's lack of access to the sea, the minister said, "The commodity should be exported by land, possibly via railroad, yet the feasibility of other methods should also be assessed."

According to Zanganeh, selling oil to the neighboring Central Asian state can reinforce ties between Tehran and Tashkent, as the enhancement of bilateral relations would serve the two countries' mutual interests.

"Exporting crude oil to Uzbekistan is fundamentally a good idea as it can promote cooperation in economic fields," the official said, noting that Tashkent also needs to evaluate the most economically feasible way of importing fuel from Iran.

Reportedly, Iran shipped 2.25 million barrels per day of oil to Asian and European destinations in September. Close to 430,000 bpd of condensate, a type of ultra-light crude, were also delivered to Asian markets, half of which was purchased by South Korea, Iran's largest condensate customer.

Following the easing of curbs on Iran's energy sector in January 2016, a growing number of European companies joined the ranks of Iran's crude oil customers.

According to Shana, the third biggest producer of the Organization of Petroleum Exporting Countries is now competing over a market of about 4 million barrels a day that constitute Europe's seaborne crude imports via tankers.

Data show that Iran exported 2.15 million bpd of crude oil and about 500,000 bpd of gas condensates in January-August on average. Crude exports peaked at 2.3 million bpd in February, the report said.

Iran's crude output has climbed to the pre-sanctions level of around 4 million barrels per day and is slated to rise to 4.7 million bpd in four years. Under the sanctions, Iran lost more than one-third of its oil production capacity, as output declined to 2.5 million barrels a day.

Asian countries, particularly those in East Asia, are Iran's main crude oil customers.

China imported over 568,000 bpd from Iran in August, ship-tracking data showed, Reuters reported.

The world's second-biggest oil consumer burns around 13 million barrels daily.

According to Shana, that amount is expected to increase by 2 million barrels a day in a few years in what would give Iran an unprecedented opportunity to cement its position in the Chinese energy market.

South Korea is looking like another increasingly reliable destination for Iranian crude. Data on Friday showed that its imports of Iranian oil increased 40.2% in August from the same month a year earlier.

The world’s fifth-biggest crude importer bought 1.55 million tons of Iranian crude last month, or 365,641 barrels per day, compared with 1.1 million tons in the same month of 2016, customs data showed on Friday.