Iran has suspended all its petrochemical exports to ensure domestic supply amid reduced local availability following Israeli strikes early this month.
The Islamic Republic is halting all exports to prevent a supply crunch for its domestic industries and raw materials, local economic newspaper Donya-e-Eqtesad reported on Thursday.
A senior official at the National Petrochemical Company issued the order earlier this week, the Iranian media report. Exports would be halted until further notice, according to the directive.
The export halt is intended to support Iran’s downstream industries and consumers following damage caused by recent attacks and to ensure adequate supply on the domestic market, as per the directive.
In early April, Israel hit several key petrochemical production hubs in Iran, including at the Mahshahr Petrochemical Special Zone in southeastern Iran and the country’s biggest petrochemicals complex at Asaluyeh. The petrochemical facilities at Asaluyeh account for about half of Iran’s total petrochemicals production.
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Iran was forced to shut down part of the facilities as the Israeli strikes on April 4 and 6 damaged power lines and providers of feedstocks for the petrochemical plants.
Iranian authorities have kept the prices of petrochemical and related products at levels from before the war despite the surge in global prices. Prices will remain low as Iran looks to support its domestic industries and consumers.
Iran exports 29 million tons of petrochemical products annually, worth about $13 billion in revenue each year, according to estimates by state media.
The halt to petrochemicals exports adds further economic pressure on Iranian revenues, on top of the U.S. blockade outside the Strait of Hormuz, which targets to prevent ships from going to and from Iranian ports.
Nevertheless, Iran-linked tankers, while steering clear of the U.S. blockade, are testing the practical limits of the blockade and attempt to move in an out of the Strait of Hormuz using deceptive operational patterns, including spoofing and reduced visibility.
By Charles Kennedy for Oilprice.com
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