A report by the Iranian parliament says that government revenues from exports of petrochemical products could decrease by around a third as a result of a coronavirus pandemic that has badly hit the demand side in the international markets.
The Iranian Parliament’s Research Center (IPRC) said in its Saturday report that petchem revenues would fall by at least 30 percent in the current calendar year which started in late March compared to the year before.
The report said a main reason for the slump would be the depressed prices in the international oil markets as well as problems with transportation of goods across the borders and on the sea.
It said revenues derived from the sale of petrochemicals have been a main component of Iran’s foreign currency income since the United States imposed its sanctions on the country’s direct export of crude in November 2018.
“Given the current circumstances, there must be a proper planning to manage the impacts and consequences of the drop in foreign currency revenues derived from the export of petrochemcials,” it said.
Government estimates suggest Iran’s petrochemicals sector is generating around $12 billion per year in export revenues.
The government had estimated that total revenues from the sector, including the domestic sale, would reach $25 billion by 2021.
Output was also planned to increase to 100 million metric tons per year with the completion of 27 petrochemical projects across Iran in the next two years.
The IPRC said that the slump in demand would directly affect Iran’s sale of methanol, liquefied petroleum gas (LPG) and aromatics. It said demand for other products like various polymers, urea and ammonia would gradually decrease over the next months.
It said, however, that Iranian refineries that produce raw materials for disinfectants and other items needed to fight the new coronavirus may feel less of the heat.