Sanctions to hit Iran’s oil exports

singapore — Iran will export significantly less oil than was initially expected when the US first announced it would reimpose sanctions on Tehran, and that should boost prices, a senior executive at commodities trader Trafigura said on Monday.

“I think when the sanctions were first announced a number of months ago, people were estimating the cut may be 300,000 to 700,000 (barrelsper-day),” Ben Luckock, cohead of oil trading at Trafigura, told reporters. “I think the consensus has moved to it’s going to be well beyond one million bpd that’s cut, and maybe 1.5 million bpd.”

Buyers across Asia have come under US pressure to reduce their Iranian oil imports as Washington aims to cut exports from Opec’s third-largest exporter to zero to force Tehran to renegotiate a nuclear treaty.

Still, Luckock says Chinese companies will likely continue to import Iranian oil, while other traditional customers may cut volumes but not reduce imports to zero. “Export (of Iranian oil) is not going to be zero but it is going to be significantly less than it was. And probably lower than most people expected when sanctions were announced, and hence the higher (oil) prices,” he said on the sidelines of the Asia Pacific Petroleum Conference in Singapore.

Iraqi and Mexican oil have been favoured by buyers as alternatives to Iranian crude, he said. —