Iran's oil exports are set to surge in May, climbing nearly 60% from a year ago, with European shipments recovering to about half the pre-sanctions levels, according to a source with knowledge of the country's crude lifting plans.
This shows Tehran is regaining market share at a faster pace than analysts had projected, as it battles with rival producers for market share, Reuters reported.
April loadings at 2.3 million barrels per day were around 15% higher than the International Energy Agency estimated earlier this month.
May shipments are set to jump to 2.1 million bpd from 1.3 million bpd during the same month in 2015, when Iranian exports were constrained by western sanctions imposed against its nuclear program. The April loadings were the highest since January 2012.
The increase in loadings suggests that Iran has overcome a tanker shortage that threatened to derail attempts to regain market share after the sanctions were lifted in January.
Saudi Arabia will feel the surge in Iranian exports most keenly as it struggles for regional supremacy with Iran, with the oil market becoming a key battleground.
"The kingdom plans to boost production in the coming months to squeeze the Iranians," said Ian Bremmer, the president of political risk consultancy Eurasia Group, who spoke recently with executives and a member of the ruling family.
"The production increase could also boost returns for the planned Saudi Aramco share sale and help ensure a smooth succession for Deputy Crown Prince Mohammed bin Salman," Bremmer told Reuters on Wednesday.
Bremmer said increases of as much as 1 million bpd were mentioned, though he was skeptical about the higher targets.
Loadings for China, Iran's biggest customer, were nearly 840,000 bpd in April and more than 620,000 bpd are planned for May.
Iran's sales to Europe, including Turkey, are also rising fast, according to the source. April loadings to Europe totaled 487,000 bpd and are set for 400,000 bpd this month. European countries were buying as much as 800,000 bpd before 2012.
Oil major Total SA is set to take 160,000 bpd of crude in May, down from the 240,000 bpd loaded in April. Loadings to Spain are set for 32,000 bpd in May, while Greece will take 65,000 bpd.
