TEHRAN - Iran's crude oil exports grew by roughly 50 percent in 2023 to a five-year high of about 1.29 million barrels per day (bpd), with the vast majority going to China, Nikkei Asia reported.

The report, citing the International Energy Agency (IEA), put Iran’s oil production at 2.99 million bpd last year, 440,000 barrels more than in 2022.

As reported, IEA predicts a further rise of 160,000 barrels of Iran’s oil exports in 2024.

This increase is expected to contribute to a less tight market, alongside increases by the U.S. and Brazil. The IEA sees global supply rising by 1.5 million bpd to an all-time high this year.

The Japan Organization for Metals and Energy Security forecasts the supply-demand balance flipping from a shortfall of 110,000 bpd last year to a 600,000-barrel surplus in 2024.

Brisk Chinese demand is encouraging Iran to ramp up production. Roughly 90 percent of Iran's crude oil exports went to China, data from European research firm Kpler shows.

While OPEC members and Russia have been coordinating output cuts, Iran is not subject to quotas despite being part of the bloc, due to its sanctions-fueled economic struggles.

Iranian President Ebrahim Raisi's administration has been building ties with Beijing amid the tensions with the U.S. and Europe. Raisi and Chinese counterpart Xi Jinping met in China last February and agreed to call for U.S. sanctions to be lifted.

China's 40-plus small and midsize independent refiners often buy oil from Iran with yuan, according to Reuters and other sources. Iranian crude traded at an average discount of $13 to Brent last year.

EF/MA