Coronavirus punctured some of the biggest economies, leading them to a downward trajectory. However, despite being enclosed by double barriers — US sanctions and coronavirus crisis — the Iranian economy reportedly sky-rocketed in the month of September 2020. In this latest development, not only did the Iran UAE trade defy US sanctions, but also the Emirate’s alliance with the western superpower by aiding the Iranian oil sector economy.
UAE and Its Confused Alliance
Lockdown due to Covid-19 led several businesses to a crisis due to downfall in demand while nations faced economic crisis. However, even in this time of hardship, Iranian oil exports managed to sky-rocket steeply in the month of September. What’s more interesting is the fact that the exports took place defying US sanctions on Iran, contributed to by nations like United Arab Emirates, Turkey and China.
US-China rivalry is evident to the world, however, the State has been a friendly ally of the UAE, which not-so-long-ago signed the US-brokered Abraham Accord and is a counterterrorism partner of the US.
Disregarding the facts, data shared by TankerTrackers and two other organizations that chose to remain anonymous showed that Iranian oil exports kept flowing with the help of the UAE. On the contrary OPEC nations and neighboring ally, Saudi Arabia, struggled with a falling crude demand amid the #Covid-19 lockdown, leading to a global economic crisis.
The Contrast
Iranian oil exports have reportedly fallen from 2.5million barrels / day since the US withdrew from its nuclear deal and reimposed financial sanctions in 2018. However, their boat remained afloat, regardless.
According to the co-founder of TankerTrackers, Samir Madani, “Exports are way up right now. We are seeing close to 1.5 million bpd in both crude and condensate so far this month.” He added, “These are levels we haven’t seen in a year and a half.” The amount of exports shown in September saw twice an increase as compared to August data.
Almost half of the oil exports from Iran consisted of those picked by vessels belonging to foreign nations through ship-to-ship transfers, which made it difficult to determine the destination of the shipment.
Oil trade-based Iran UAE relations cannot be confirmed officially. However, data provided by Refinitiv Eikon shows Iran’s crude export and condensate at 383,000 barrels / day in the month of August. The destination of these exports were the United Arab Emirates, China and Turkey. Eikon hasn’t reported any crude or condensate export data for the month of September so far.
However, there are multiple reasons why Iran’s September month’s export has no data pointing at the destination. Firstly, tankers that load Iranian crude are reported to have sometimes turned their AIS signal off. AIS is an automatic tracking system that is used on ships, and is later switched on at a later part of the oil export’s journey, which makes tracking harder, confirms oil industry sources.
Secondly, Iran stopped providing production figures to OPEC or the Organization of the Petroleum Exporting Countries since US reimposed financial sanctions on the Persian Gulf nation. This too has been a reason responsible for making tracking of shipment nearly impossible.
Authorities in Iran also refused to comment on the matter.
Will Iran UAE trade relation end up risking the Gulf nation’s ties with the States or will the inauguration of Joe Biden’s administration into White House normalize relations with Iran?
