EghtesadOnline: Iran is one of the largest producers of petrochemicals supplying the global downstream industry vital raw material, and it would be difficult to find alternatives for such quality products, a lawmaker said.
Regarding the talk about the petrochemical industry being sanctioned by the US, Ali Bakhtiar rejected the likelihood as a “media stunt and not something doable and feasible,” the parliamentary news website ICANA reported.
President Donald Trump on Wednesday ordered new sanctions on Iran, this time targeting the export revenues from industrial metals sector including iron, steel, aluminum and copper. “Tehran can expect further actions unless it fundamentally alters its conduct,” the belligerent American leader said.
The Wall Street Journal reported last week that the next wave of sanctions would target petrochemicals and the US administration will likely impose those sanctions soon, Financial Tribune reported.
Washington withdrew from the 2015 Iran nuclear agreement last May and imposed banking and oil sanctions in the second half of 2018. US waivers to eight countries that imported oil from Iran expired on May 2 of this year.
“The issue of petrochemicals is different from oil,” Bakhtiar said. “The United States thinks Saudi Arabia can produce more petrochemicals like oil and make up for Iran’s absence in the market. Not only does Saudi Arabia not have this capability, there are serious doubts if the Arab country can replace Iranian oil”.
The lawmaker holds the opinion that sanctions can cause no harm to Iran’s petrochemical exports. “Diversifying products and turning to petrochemical export with more buyers is a practical way to evade further sanctions.”
Iran produces a large variety of petrochemicals (almost 350 types), for which there is high international demand, and exports to 30 Asian, European and South American countries.
Companies, Not Countries
Officials in Tehran say there are several hundred customers worldwide for Iran’s products. “Petrochemical customers are not countries. They are private companies,” the director for projects at the National Petrochemical Company said.
“For example, when methanol is shipped to India, there are many buyers who cannot be easily detected,” Ali Mohammad Bosaqzadeh said.
Unlike Iran’s oil sector, the petrochemical industry cannot be embargoed. The diversity of petrochemical products plus high global demand make the nature of the industry un-sanctionable, he was quoted as saying.
A total of 55 companies in Iran annually produce 55 million tons of petrochemicals for the domestic and international markets. With the completion of petrochemical plants, namely Marjan in Asalouyeh, the first phase of Bushehr Petrochemical Complex and Kaveh Methanol Company in Bushehr Province, annual output will surpass 63 million tons.
In the March 2018-19 fiscal, Iranian companies exported $10.5 billion worth of petrochemicals including methanol, ammonia, polystyrene, ethylene glycol, urea, butane, propane, low-density and high-density polyethylene, natural gas condensate, cement, aromatics and polyolefin.
The petrochemical sector in Iran is the second important industry after oil and gas. It has played a key role in economic growth as it creates value-added and reduces the oil and gas export on which the economy has been dependent for decades.