Iran’s oil minister said Tuesday that stockpiling gasoline in his country has reached an “unprecedented historic level” due to falling demand.
Bijan Namdar Zanganeh, speaking at a meeting of oil industry officials in Tehran, explained that both foreign and domestic demand has fallen as a result of the coronavirus pandemic.
Sanctions imposed by the United States have also substantially reduced Iran’s crude oil and other exports. Except a limited amount of gasoline unofficially going to neighboring countries, Iran cannot hope to have large-scale exports.
Zanganeh also spoke of falling profits for refineries and the postponement of oil projects in the country. Apparently as a result of less oil production, petrochemical plants receive 40 percent less oil by-products needed for their own production.
Last year, the average daily consumption of gasoline in Iran was 97 million liters or around 25.5 million gallons. But after the start of the pandemic, consumption has fallen to 65 million liters a day in the last two months.
The pandemic has hit fossil fuel prices hard, with oil trading at half the price of three months ago. Iran was counting on reasonably high gasoline prices this year to make hard currency by exporting it to regional countries.