Coronavirus Wipes Out Iran's Oil Derivative Exports

“Domestic demand for oil derivatives is rising and neighbors, including Iraq, have stopped their imports due to the outbreak of coronavirus disease 2019 (COVID-19),” Hamid Hosseini was quoted as saying by ILNA Saturday.

According to the official, Turkey, Afghanistan, Turkmenistan and Iraq have suspended imports of petroleum products from Iran from last week, Financial Tribune reported.

“Iraq’s Kurdistan region limited import for three days. However, as soon as prices rose and demand increased, it resumed oil derivatives imports from Iran.”

Referring to Iraq as a strategic market, he said in 2018 the value of Iran's (oil derivatives) exports exceeded $9 billion. But outbreak of the infectious disease has deeply harmed bilateral trade.

Oil derivatives like diesel, kerosene, jet fuel and liquefied natural gas, including LNG and LPG, were exported to Iraq, Pakistan, Afghanistan and Armenia via land borders.

Pointing to the value of exports in 2016, he said, "Close to $9.1 million worth of fuel was exported by land."

The National Iranian Oil Products Distribution Company sold 10.3 million tons of mazut and diesel via bunkering facilities in the Persian Gulf since 2013. 

Between January 20 and February 20, mazut use soared in domestic power stations due to lack of natural gas as feedstock. During the weeks the cold weather pushed up gas consumption in the household sector (610 million cubic meters a day). Gas exports were also affected.

Steep Fall 

Oil prices slumped to their lowest in more than a year on Friday and were set for their steepest weekly fall in more than four years as the spread of the coronavirus stokes fears of slowing global demand.

Investors are increasingly worried as the virus has spread beyond its epicenter in China to more than 50 countries.

The most active Brent crude contract for May was down $1.42, or 2.8%, at $50.31 a barrel, a 14-month low. West Texas Intermediate crude futures fell $1.39, or about 3%, to $45.70 per barrel. US crude has fallen about 14% for the week, the biggest weekly decline since May 2011.

Energy experts say exporting refined oil products is a viable option to help evade US sanctions in the short term because they cannot be tracked, a strategy that has been hampered by COVID-19. 

According to the Health Ministry, the total number of confirmed coronavirus cases has risen to 600, with 43 people succumbing to it.

Medical staff in 20 provinces has been working tirelessly over the past week to contain the novel coronavirus that originated from China in December.