Global refiners are seeking alternatives to Iranian oil from Saudi Arabia, Kuwait, the United Arab Emirates, and Iraq after the United States re-imposed sanctions on Iran.
In 2018, Iran's total crude oil production is 3.7 MMBPD, out of which domestic refineries consumed 1.4 MMbpd. Iran produced by 2.4 MMbdp (65%) of medium sour crude and 0.6 MMbpd (16%) of heavy sour crude. Condensate sweet and light sour account for the 19% of the production.
Pre-sanctions exports from Iran accounted for the rest 2.3 MMbpd (60%) of total production. Iran exported 1.6 MMbpd (70%) to Asian refineries, 0.7 MMbpd (30%) to European refineries.
Due to the sanctions that went into effect in November, it is expected that many countries will stop their imports from Iran. However, the US government has agreed to let eight countries, including South Korea and Japan, as well as India, keep buying Iranian oil after it re-imposes sanctions on Tehran. The table below shows the exports from Iran post-sanctions, taking into consideration the waivers allowed by the US.
Iran exports are expected to drop from 2.3 MMBPD to 1 MMBPD, which will be of medium sour grade. Similar crude production of 13 MMBPD is available in other Middle East countries. About 1.2 MMBPD (10% production increase) in medium sour crude production is needed from other Middle East countries to replace Iran export volume.