Ira­nian oil ex­ports to in­crease

Weekend Argus (Saturday Edition) - - BUSINESS -

TOKYO: Asia’s top buy­ers of Ira­nian crude have cut pur­chases by about 15 per­cent so far this year, but ship­ments may start ris­ing af­ter six world pow­ers agreed to ease some sanc­tions.

Tough US and EU sanc­tions have slashed ex­ports from the Opec mem­ber by more than half, to about 1 mil­lion bar­rels per day ( bpd), cost­ing it as much as $80 bil­lion (R818bn) in lost rev­enue since early last year, the White House es­ti­mates. That pres­sured Iran to the ne­go­ti­at­ing ta­ble with world pow­ers over its con­tro­ver­sial nu­clear ac­tiv­i­ties, re­sult­ing in a his­toric deal giv­ing Tehran some relief for its shat­tered econ­omy.

In­dia has al­ready said it might start buy­ing more crude from Iran. Iran can also trans­fer some of the bil­lions in petrodol­lars that have been held up in pur­chas­ing coun­tries. Im­ports by Iran’s largest cus­tomers – China, In­dia, Ja­pan and South Korea – dropped to 924 560 bpd this year, down from 1.087 mil­lion bpd in the same pe­riod a year ago, say cus­toms re­ports and tanker data from trade sources.

In­dia made the deep­est cuts this year as two of its state-run re­fin­ers wor­ried about con­straints to insurance cov­er­age for tankers car­ry­ing Ira­nian oil and re­finer­ies pro­cess­ing it.

Al­though the Geneva deal doesn’t al­low Iran to boost oil sales for six months, In­dia has room to raise its im­ports af­ter cut­ting them about 40 per­cent.

In­dia may buy more crude from Iran in the next four months and in­tends to in­crease pur­chases fur­ther in the next fis­cal year, its top oil bu­reau­crat said on Wed­nes­day.

Un­der­lin­ing the depth of Iran’s pain from the sanc­tions, its big­gest cus­tomer, China, im­ported just un­der 250 000 bpd of Ira­nian crude in Oc­to­ber, the low­est level since June 2010.

Ja­pan, which has strug­gled to cut its Ira­nian crude pur­chases this year af­ter re­duc­ing them more than 40 per­cent last year, im­ported 127 279 bpd in Oc­to­ber, down 19 per­cent, the coun­try’s trade min­istry said yes­ter­day.

South Korea’s im­ports of Iran oil fell 9.2 per­cent to 132 648 bpd be­tween Jan­uary and Oc­to­ber.

The US be­lieves the im­pact on Iran from its and the EU’s sanc­tions forced Tehran to the ne­go­ti­at­ing ta­ble, and Wash­ing­ton has stressed that Tehran has to take con­crete steps within six months for fur­ther eas­ing of the mea­sures. The EU and the US be­lieve Iran is de­vel­op­ing nu­clear weapons, while Iran says its pro­gramme is for power gen­er­a­tion.

Iran is qui­etly mo­bil­is­ing more ships to store and trans­port oil, aim­ing to keep its fields work­ing and mit­i­gate losses while the sanc­tions re­main in place.

“It’s not like Ira­nian ex­ports will jump by another 1 mil­lion bpd straight­away,” said an of­fi­cial. “That’s why apart from the huge fall in oil we saw on Mon­day, prices have sta­bilised and are mov­ing side­ways.”

Gov­ern­ment and re­fin­ery of­fi­cials in In­dia have said they be­lieve the grant of the next six-month waiver is a for­mal­ity af­ter the Sun­day deal be­tween the world pow­ers and Iran.

Iran’s oil sales were ex­pected to fall sharply in Oc­to­ber to their low­est in months at about 719 000 bpd, ac­cord­ing to sources who track pre­lim­i­nary tanker load­ing plans. – Reuters

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