Iran oil

Types of Iranian oil

The types of Iranian oil differ depending on the grades and the features they have. Here are common oil types:

• Crude oil

  Iranian crude oil is typically categorized into heavy and light by how dense it is. Light Iranian crude oil has a higher gravity and lower sulfur content, meaning it is less thick and easier to refine. Such features make it more attractive to refiners who process it for gasoline and other light products. Heavy Iranian crude oil has higher density and greater sulfur content, making it more challenging to refine. Nevertheless, it is still in demand by some refiners who are looking to produce heavy fuels or feedstocks for petrochemical.

• Natural gas

  Iran, therefore, offers a rich supply of natural gas, which is a vital component for the production of natural gas liquids (NGL). NGL is a mixture of liquid hydrocarbons extracted during the processing of natural gas and are used in various industrial applications. Common uses include being a source of chemicals such as ethylene, propylene, and butenes.

• Condensate

  Iranian oil, which is extracted from gas fields, is called gas condensate. It is a lighter form of crude oil with lower viscosity than most crudes. Because of its low sulfur content, condensate can be refined to produce premium fuels and feedstocks.

• Heavy fuel oil

  Iranian heavy oil is a thick form of crude that requires special technology for extraction and refining. It contains a high amount of sulfur, which means that it needs complex refining to reduce the sulfur content so that it can meet the environmental standards required.

• Petrochemical feedstocks

  Iranian oil is valuable for its rich contents of petrochemical feedstocks such as naphtha. Naphtha is procured from crude oil during the initial distillation processes. It also comes from processing other liquids and is used to manufacture chemicals, fertilizers, and plastics.

How to use Iranian oil

The Iranian oil business offers various oils that are all suited for different purposes. Here are common oil usage:

• Fuels

  One of the most important uses of Iranian oil is for transportation fuels. This includes gasoline and diesel, which are produced from refining Iranian gasoline and Iranian diesel. Ionically, these two are essential for powering vehicles, aircraft, and ships. They are also used for generating electricity in power plants.

• Heating oil

  Iranian crude oil is refined into heating oil, which is used for residential and industrial heating. Heavy fuel oil is primarily utilized for heating purposes in industries, including shipping.

• Lubricants

  Iranian oils are used in the production of lubricating oils that reduce friction and provide protection for machineries operating in high temperatures.

• Petrochemical products

  Iranian oil is a vital source of feedstock for petrochemical industries producing a wide range of products used in everyday essentials. These products include plastics, synthetic fibers, rubbers, detergents, and fertilizers. Iranian crude oil is rich in naphtha, which is a primary feedstock for the production of such petrochemical products.

• Industrial applications

  Iranian heavy fuel oil is used in industrial applications for generation of energy and heat for production processes within industries.

• Export and geopolitics

  Iranian oil serves as an important tool for influencing relationships with other nations, especially sanctions. These sanctions have an impact on Iran's ability to export and sell oil to other countries.

Benefits of Iranian oil

Iranian oil has a number of benefits, especially when it is compared with other oil, which makes it popular among buyers. Here are the advantages:

• Accessibility

  Iranian oil is relatively easy to source and access. This is because it is accessible through a large and well-established trading infrastructure, which consists of pipelines, ports, and refineries.

• Versatility

  Iranian oil is versatile and can be refined into a wide range of products, including fuels, lubricants, and petrochemicals. This makes it an attractive option for refiners, as it can be used to produce many valued end products.

• Affordability

  Iranian oil is relatively cheaper to buy compared to other oils. The high viscosity and sulfur content make it less desirable for some refiners, thus leading to lower prices. Furthermore, due to the sanctions on Iranian oil, it is sometimes sold at discounted prices. This allows buyers to purchase it at lower prices than other crudes.

• Rich in hydrocarbons

  Iran oil is rich in hydrocarbons, which are organic compounds consisting of hydrogen and carbon that are used to produce many valuable products. Its richness makes Iranian oil preferable because it is a key source for producing gasoline, diesel, jet fuel, and other petrochemical feedstocks.

• Historical refinement experience

  Iranian oil has been refined and processed for a long time. As a result, existing refinery infrastructure has developed the capability to effectively utilize and convert Iranian oil into valuable products.

• High yield

  Iranian oil provides a high yield of refined products, especially if processed using advanced refining technologies like hydrocracking and catalytic desulfurization.

• Economic significance

  Iranian oil production and exportation hold enormous importance for the economy of Iran and some other countries that import the oil. Revenue generated from Iranian oil contributes to government budgets and funding for public services. Therefore, sanctions on Iranian oil affect not only Iran but also countries that rely on Iranian oil.

Considerations when buying Iranian Oil

When buying Iranian oil, buyers should consider a number of factors that affect the quality and the prices. Here are key main factors to consider:

• Oil grade

  Iran offers various oil grades, ranging from light to heavy, and each has a different sulfur and viscosity level. Light Iranian crude is more suitable for producing gasoline and diesel, while heavy crude is appropriate for producing low-value products such as heavy fuels.

• Market dynamics

  Buyers should understand the current market conditions for Iranian oil, which are influenced by global oil prices, demand, and geopolitical developments. They should also consider the availability of certain grades and the competitive pricing.

• Refinery capabilities

  Different refineries have different capabilities to process Iranian oil, which affects the choice of oil buyers go for. Buyers should consider the sulfur content and viscosity of Iranian oil, as well as their own refineries.

• Sanctions and regulations

  Buyers should understand the sanctions and regulations related to the purchase and transportation of Iranian oil by some countries as they affect the buying and selling of the oil.

• Transportation

  Iranian oil is transported through pipelines and tankers, and buyers should consider the logistics involved in the transportation. Therefore, they must factor in the costs, delivery time, and security risks.

Q&A

Q1. How do buyers transport Iranian oil out of the country?

Iranian oil is primarily transported through pipelines, though some are carried through tankers. The oil that is transported through pipelines is heavier and more viscous. On the other hand, the lighter crude that is often called Iranian olive oil, along with other oils like gas liquids and condensate, are carried through the tanker. Tankers also carry the crude oil through the Persian Gulf and the Strait of Hormuz to international markets.

Q2. What sanctions have affected the trading of Iranian oil?

Iranian oil is facing enormous sanctions from the US and EU aimed at restricting Iran's ability to sell oil since it is accused of nuclear and destabilizing programs. These sanctions, which target the oil sector, are aimed at reducing the production and export of Iranian oil. As a result, some countries have imposed restrictions on buying Iranian oil, and others have offered incentives to stop them. While these sanctions have reduced the volume of Iranian oil in the market, they have not completely eliminated them, as some buyers purchase them clandestinely.

Q3. Are there any alternatives to Iranian oil?

There are many alternative oils to peri-Anglian oil. Just like Iranian oil, they offer various grades and can be used for various purposes. They also have specific characteristics, including viscosity and sulfur content, that make them suitable for certain refinements. The alternatives to Iranian oil include Saudi oil, Iraqi oil, and Kuwaiti oil.

Q4. Why do buyers prefer Iranian oils to others?

Even though Iranian oils have sulfur and high viscosities, which makes it hard for some refiners to conquire them, they are still preferred by some buyers. The buyers who prefer Iranian oil do so because it is often sold at lower prices, especially by countries that are not subject to sanctions. Furthermore, the high sulfur content also means that it can be refined into valuable products, such as lubricants and heavy fuels.