Iran's Currency Rises On Optimism Over A Nuclear Deal

Firms such as TankerTrackers that monitor shipments and vessel movements worldwide, and the advocacy group United Against Nuclear Iran have reported that China imported a daily average of 850,000 barrels of oil and biproducts from Iran in 2021, much higher than in the previous year.

Data released by China’s Customs Administration, however, shows there was no increase year-on-year in Iranian imports. (We cannot use the link to the figures because China's Customs website indicates it is 'insecure'.)

The average price of Iranian oil is believed to have been $70 per barrel in 2021 and China bought more than 300 million barrels, which would make the total more than $20 billion.

When the United States imposed full sanctions on Iran’s oil exports in May 2019, China continued to buy 100,000-200,000 bpd until the third quarter of 2020. But before the US presidential elections, reports emerged that Iran was shipping more crude to China and the volume steadily increased, reaching the current levels.

Throughout last year, major American business publications such as The Wall Street Journal and Bloomberg were reporting that China had substantially increased its oil imports from Iran, which could undercut Washington’s leverage in the nuclear talks.

A report issued this week by Iran’s Customs Organization puts the country’s non-oil exports to China in 2021 at more than $13 billion, which is twice what China claims it imported from Iran. If this figure is correct, it means Iran’s total exports, including oil, reached $35 billion versus $6.5 billion announced by Beijing.

The figure for non-oil exports to China announced by Iranian customs must have included petrochemicals and minerals, since its overall figure for exports in these sectors in 2021 was more than $20 billion. China is the biggest customer for Iran’s petrochemicals and minerals.

United States has also sanctioned many of Iran’s petrochemical companies for their ties with the Revolutionary Guards, which is designated as a terrorist organization by Washington. There are also sanctions on many Iranian mining companies, especially dealing in metals.

This could be the reason why China has not disclosed the real monetary value of imports from Iran.

Critics say the Biden Administration has failed to enforce sanctions imposed by former president Donald Trump on Tehran, as it has been trying to revive the 2015 nuclear agreement (JCPOA) with Iran. China seems to have taken advantage of this.

In 2018, Iran’s Supreme Leader Ali Khamenei signaled a new emphasis in Iran’s foreign policy dubbed ‘Looking East’ and in March 2021 Tehran and Beijing signed a 25-year strategic cooperation agreement with details kept secret. Iran expects China to invest up to $400 billion, which would include what many fear privileges for Chinese companies, particularly in oil and gas.

One day after the incident, Iran’s official IRNA news agency denied there was any link between the country and the oil tanker.

The IRNA report tried to use vague wording in its denial, suggesting that the cargo had been sold by Iran to an intermediary for delivery to a final customer, saying, “IRNA has learned from informed sources that this oil tanker does not belong to Iran and the only possibility is that its cargo belongs to one of Iran’s customers.”

Tanker tracking firm TankerTrackers confirmed the news in a tweet on Saturday, saying that “an old uninsured foreign-flagged tanker carrying half a million barrels of Iranian oil caught fire in the Far East”.

TankerTrackers added that they informed clients of the vessel’s identity and location.

According to reports, Iran normally transfers oil to different tankers in the sea to get round US sanctions since 2018 and send oil to China.

Fars news agency affiliated with the Revolutionary Guard said earlier in February that Iran’s oil export income grew by 494 percent in the first 5 months of the Raisi administration.

Earlier in January, a report detailed Iran’s large diesel smuggling network, revealing the role of the Revolutionary Guard and private shipping companies in the illicit trade.

The container vessel, named Kabul, belongs to the Admiral Shipping Company that Iranian media said is owned by Hassan and Hossein Shamkhani, the sons of the secretary of Iran’s Supreme National Security Council.

ILNA news agency reported on Friday that an Indian court has ordered the seizure of the ship and cargos originating or destined to Iran about 10 days ago.

The container ship is impounded on charges of possessing false documents, and has been anchored at Kandla, officially Deendayal Port -- a seaport and town in Kutch district of Gujarat state in Western India -- for 10 days ago.

According to Marine Traffic, KABUL is a container ship that was built in 2001 and is sailing under the flag of Saint Kitts and Nevis.

In recent years, the economic activities of Shamkhani’s family, including his brother and son-in-law, have been widely criticized and made headlines in Iran. Shamkhani was an admiral in Iran’s navy and a former IRGC commander.

He has recently been an outspoken critic of the Vienna talks to revive the Iran nuclear deal. After news about the impounded ship broke, critics quipped that continuation of United States’ sanctions are apparently good for Shamkhani family’s business interests.

This week, the publication of an audio recording implicated top commanders of the Revolutionary Guards in a massive corruption scheme in mid-2010s.

Rouhollah Latifi, spokesperson for the Customs Administration office, said Friday that 570 items confiscated included old coins and books.

The shipment was found in a truck loaded with second-hand home furniture in transit to Canada at the Bazargan border crossing, West Azarbaijan province, the spokesman said. The coins were worth several billion rials, Latifi added.

Within the haul were 18 bronze pieces dating from the first millennium BC, antique daggers, seven glass chandeliers, 322 silver coins, a one-dollar coin minted in 1845, some Qajar-era (1795-1925) plates, and a handwritten gold-gilded Qur'an.

Under Iranian law, such artifacts are deemed part of "national heritage" and illegal to export unless expressly authorized by the relevant authorities. Smuggling antiques can lead to years of imprisonment and fine equal to twice the value of the smuggled items.

Iranian items legitimately for sale in western auction houses or by dealers – including carpets, manuscripts, painting, ceramics, and woodcrafts – can fetch from a few hundred dollars to hundreds of thousands, or more. London’s Victoria and Albert Museum bought the 16th-century ‘Ardabil carpet’ in 1893 for £2,000.

The group, including the Netherlands-based Center for Human Rights in Iran, issued a statement Friday told world power trying to revive the 2015 Iran nuclear deal they should be “maintaining” sanctions against Iran’s President Ebrahim Raisi.

Raisi was designated by the United States in 2019under an executive order signed by President Donald Trump allowing sanctions against anyone linked to the office of Iran Supreme Leader Ali Khamenei. The rights’ groups’ statement attributed Raisi’s listing to his role 31 years earlier in the 1988 prison executions, which the US Treasury cited in its press release announcing the designation.

Iran, backed by other participants, has argued that talks in Vienna should stick to the original logic of the 2015 deal, the JCPOA (Joint Comprehensive Plan of Action), in isolating the nuclear from other issues.

The rights groups statement said US “human rights sanctions” were imposed due to “the Iranian government’s egregious rights violations and abuses,” and that Raisi had “personally participated in ‘Death Commissions’” in 1988.

Hadi Ghaemi, executive director of the Center for Human Rights in Iran, said: “We cannot sacrifice human rights at the mantle of the nuclear negotiations with the Islamic Republic.”

as/ms