Iran denied on Friday its petrochemical exports had plunged due to European Union sanctions which have made it difficult for shippers to find insurance to transport cargoes.

According to traders and shipping data, Iranian petrochemical exports have plunged nearly 90 per cent in the last two weeks due to EU sanctions.

Shipping data showed a sharp drop in the exports, which include methanol, xylene and caustic soda, to around 60,000 tonnes a week in May from a weekly average of 350,000 tonnes last year.

"We don't even have one tonne of petrochemical products in storage ... Iran has found its way around cargo insurance sanctions," Deputy Oil Minister Abdolhossein Bayat told the semi-official Mehr news agency.

EU sanctions prohibiting European insurers and reinsurers from covering tankers carrying Iranian petrochemicals came into effect on May 1, forcing out most of the ships operating in the niche market.

Around 90 per cent of the world's tanker fleet, including those operated by Iran's Petrochemical Transportation Company, is covered by Western-based protection and indemnity (P&I) clubs, which insure against personal injury and environmental clean-up claims.

"The export of Iran's petrochemical products is taking place as usual," Bayat said, adding that such reports were aimed at making psychological warfare against the Islamic state ahead of its meeting with major powers on Tehran's disputed nuclear programme.

Tehran resumed nuclear talks with major powers in mid-April after more than a year and a second round of talks is scheduled for May 23 in Baghdad.

But Opec's second-largest oil producer could be exporting more petrochemicals than is evident from shipping data, as captains on some of Iran's ships have turned off the black box transponders that monitor vessel movements.

Traders have said China, Iran's top oil customer, is probably the only buyer of Iranian petrochemicals so far this month. Chinese firms, such as Nanjing Tankers and Sinochem Corp, have been able to get insurance from domestic providers.-Reuters