* Oil exports stay above the agreed cap set in interim deal
* July 20 deadline looming for agreement between Iran and
By Jonathan Saul and Alex Lawler
LONDON, July 1 Iran's crude oil exports dropped
in June after a spike in May, yet sales were still above the
level allowed by an interim deal aimed at curbing Tehran's
nuclear programme, according to sources who track tanker
Under the agreement signed in November between Iran and six
world powers, which came into effect in January, Iran's exports
should average 1 million barrels per day (bpd) through to July
Iran's oil exports slipped to 1.21 million bpd in June, from
1.33 million bpd in May, one of the sources said.
"Total exports are about 10 percent down month-on-month as
China and India have taken less," the source said.
"Exports in June to Japan and Turkey have been firm and
South Korea has taken more, making up for lower sales to that
destination in May."
A second source said Iranian crude exports fell by 100,000
bpd to almost 1.2 million bpd in June from May's high levels.
China, Tehran's largest oil client, has since late 2013 been
stepping up purchases from the OPEC country. China's Iranian
crude oil imports expanded 36 percent in May, or 757,900 bpd,
from a year ago to the second highest on record, customs data
showed last week.
Though higher exports since late 2013 have bolstered Iran's
coffers, officials in U.S. President Barack Obama's
administration have said they expect Iran's oil sales to average
"approximately" 1 million bpd over the entire six-month period
under the agreed deal, which expires on July 20 but can be
extended for up to six months.
"Iran is increasingly emboldened to export its oil," said
Mark Dubowitz of U.S.-based independent think-tank Foundation
for Defense of Democracies (FDD).
"The Obama administration already has sent the message that
it won't crack down on Iran's excess crude oil sales,
condensates exports, or its transfer of crude oil to (Syrian
President Bashar al-) Assad despite congressional demands," he
The U.S. administration has argued that condensates, a
premium-price form of very light oil found at natural gas fields
and mostly used to make plastics, do not count as crude oil;
that Iranian gifts of oil to Syria are not "sales" and so also
do not count; and that Iran is allowed to sell between 1 million
and 1.1 million bpd under the deal, a range slightly above the
White House's public estimate.
The extra supply is not unwelcome in the global market at a
time of concern about flows from Iraq.
"The U.S. authorities appear to have been very tolerant of
rising Iranian condensate supplies, which have boosted observed
imports of Iranian oil by Asian buyers," a senior executive at
an oil company said.
U.S. Secretary of State John Kerry warned Iran this week it
still had to prove its nuclear ambitions were peaceful as the
latest round of atomic talks with world powers was due to start
in Vienna on Wednesday as the July 20 deadline for an agreement
In Tehran, Iranian President Hassan Rouhani said in a speech
Western sanctions were already crumbling.
"U.S. negotiators seem so eager for a nuclear deal that they
appear willing to steadily loosen the once crippling
restrictions on Iran's oil lifeline even before winning the
critical concessions," the FDD's Dubowitz said.
(Editing by William Hardy)