Iran says its oil sales have remained at relatively high levels despite changes brought on by the effects of the Ukraine war and the persistence of United States sanctions.

Iran is now exporting more than one million barrels of crude oil and gas condensate per day, according to petroleum ministry data cited by the state-run IRNA news agency and “Iran”, the government’s daily newspaper.

Overall, the outlets said Iran has sold 40 percent more crude, oil derivatives, natural gas and gas condensate in the first two months of the current Iranian calendar year that ended on May 21 compared with the corresponding period last year.

Senior officials in the administration of President Ebrahim Raisi have repeatedly said oil sales in the initial months of his presidency have jumped by 40 percent while refraining from publishing detailed figures as the country remains under stringent US sanctions.

But actually receiving the yields from selling crude and other products has been another considerable issue for Iran since former US President Donald Trump embarked on his “maximum pressure” campaign of sanctions in 2018 after walking away from the 2015 Iran nuclear deal.

Formally known as the Joint Comprehensive Plan of Action (JCPOA), the landmark deal reached between Iran and world powers, including the United States, aimed to put curbs on Tehran’s nuclear programme in exchange for sanctions relief.

But Trump’s successor, Joe Biden, who had promised to revive the nuclear deal, has continued the sanctions.

According to the Iranian state outlets, the country has fared better in this regard as well, as it cashed in $7.5bn in oil and petrochemical products sales in the first two months of the Iranian calendar year, reportedly 60 percent higher than the year before.

While they credited the significant increase in global oil prices mainly due to the Ukraine war as partly being the reason behind the rise, they said the main reason has been a considerable increase in actual oil sales by the government and more success in receiving the money.

This comes amid reports that Iran’s crude exports have taken a big hit as Western sanctions on Russia have prompted it to pump its oil east with a discount, an opportunity that was jumped on by China, the largest purchaser of Iranian barrels.

US and European sanctions imposed over Russia’s invasion of Ukraine in late February and the subsequent heavy discounting of Russian crude left close to 40 million barrels of Iranian oil stored on tankers at sea in Asia without buyers, the Kpler data and analytics company said late last month.

The firm also estimated that Iran’s crude exports were below one million bpd before April and only experienced a drop in April due to the effects of the Ukraine war.

But the Iranian petroleum ministry statement cited by IRNA countered that while the country’s oil exports may be affected by market changes, they will not face drastic drops and “only the geography of the market may change”.

Apparently referring to Iran’s own discounts, the ministry confirmed that it allocates “facilities” to make its oil more attractive to buyers, but emphasised that “oil sales will never be done without first ensuring the country’s interests”.

Moreover, it claimed that oil sales have been strong enough that they covered the previous Iranian year’s budget deficit, and allowed the Raisi administration to run the country without borrowing from the central bank, a practice that has been a main driver of runaway inflation throughout the decades.

‘Missing out’

Since Russia produces more oil, it has more options in offering discounts while its absence from the market drives more price hikes, according to energy journalist and analyst Hamidreza Shokouhi.

“When figures show China and India have increased their purchases from Russia, naturally a country like China isn’t going to cancel its overt contracts with other countries, it will reduce its intake from countries like Iran,” he told Al Jazeera.

“That’s especially true as Russia offers better discounts, which is more attractive to China as it purchases large quantities regardless of who’s selling it.”

On the other hand, Shokouhi said Iran can’t offer considerably higher discounts as its production capacity – recently fluctuating between 2.5 million to 2.8 million bpd – is limited.

This is while about 15 months after the Vienna talks aimed at restoring Iran’s 2015 nuclear deal with world powers started, they have yet to make a breakthrough. If the accord is revived, sanctions on Iran’s oil and banking sectors will be lifted.

But the US has signalled it will exert more pressure on Iran, including by more stringently impose its oil sanctions, if the talks fail.

American and European officials have recently warned that the odds of reviving the deal are decreasing, which will have ramifications for Iranian oil regardless of how well sanctions are implemented.

For one, the country was producing up to four million bpd prior to the sanctions, about half of which it was exporting. But it is now missing out on the opportunity to sell significantly more oil than it is while global prices are over three times their levels before the sanctions, Shokouhi said.

“But the second aspect, which I think is even more important, is that we can’t attract investments and technology to develop our oil and gas fields,” he said, adding that launching several energy fields has stalled for years.

“Each day that we delay, our production capacity could be affected and we must consider this.”