Iran has been selling petrol at a heavily discounted rate to help boost its petrochemical export revenues, as the country continues to feel the squeeze under the United States’ “extreme pressure” policy, the Shargh daily reported.

Since its withdrawal from the nuclear deal in 2018, Washington has imposed severe sanctions on Iran’s export of oil, gas and petrochemical products, as well as its banking system and many other economic sectors.

However, in recent weeks Iranian authorities say the oil-rich country has seen an increase in income from oil and gas exports, despite the US sanctions adhered to by the international community.

One of the main reasons for the growing revenue, according to the daily, is the significant discount that Tehran offers to parties who are willing defy the sanctions and purchase Iran’s products.

“The data from Iran’s Customs Administration indicates that last year [on average] Iran had exported every litre of petrol for $0.38,” Shargh wrote.

“According to reports from the OPEC, the average price of one litre of Iran’s crude oil in the same period was about $0.49. These numbers show that Iran suffered a huge loss and sold the petrol cheaper than crude oil,” the daily added.

In some months, the production costs exceeded what Iran had received for the exported petrol, the Iranian Parliament Commission on Energy was quoted by the daily as saying.

Oil exports from Iran, which sits on the world’s fourth-largest reserves of crude, plummeted from a peak of 2.8m barrels per day in 2018 to as low as 200,000 bpd following the US withdrawal from the nuclear deal and the imposition of sanctions.

Although Iran does not divulge exact figures on oil sales, an Iranian oil official said the figure was currently around 1.5m bpd, with most going to China at a big discount Iranian authorities have declined to reveal.

Global crude prices remain high, with Brent crude reaching $139 a barrel in March, its highest since 2008, after Russia’s invasion of Ukraine exacerbated supply concerns.

While Tehran’s ultimate aim is still to resurrect the nuclear deal and so have sanctions lifted, some Iranian officials said soaring oil prices had opened a window of opportunity for Iran by increasing revenues, giving the economy months of breathing space.

“If the talks fail it will not be the end of the world,” said an Iranian official who spoke to Reuters, adding that the fact Iran’s economy was not now so reliant on a revival of the deal would provide strong leverage for its negotiators if or when the talks resumed.

Iranian officials announced that Iraq would soon begin paying back its debt to Tehran, estimated at around $10bn, which was blocked due to sanctions on Iran’s banking system, the state-run news agency IRNA reported.

The Iraqi government owes billions of dollars to both Iranian private and public companies, according to the head of the Iran-Iraq Joint Room of Commerce, Yahya Al-e Ishagh.

“In the coming days, the normal process of paying Iran’s demands will begin, based on agreements between the two countries,” Al-e Ishagh was quoted as saying by IRNA on Saturday.

“Iraq owes $1bn to the public sector, and with the solutions that Iran’s central bank has proposed, this debt will be paid soon,” he said, without elaborating if that money would be transferred to Iran or if Baghdad would export goods to its neighbour.

In addition, the Iraqi government owed $9bn to Iranian private companies, said the official.

Iran is Iraq’s leading gas and electricity supplier, but it cannot receive the money for its exports due to international sanctions imposed by western powers since 2012, which cut off Iranian banks’ access to the international money transfer system.

Tehran has called on the US to lift some sanctions on Iran to show its goodwill towards reviving the international nuclear agreement.

“On multiple occasions, we have told Americans they should bring forward one or two practical points prior to any agreement, for example by releasing some of Iran’s assets withheld in foreign banks,” Iran’s foreign minister, Hossein Amirabdollahian, said last month.

In April, officials in Tehran said that Iran’s blocked money in South Korea would be released based on bilateral agreements; however, so far, Seoul has not transferred any money or goods to Iran.

Source: https://www.middleeasteye.net/news/iran-