Tuesday, 25 June, 2019

Iranian oil exports drop further

Oil dips but bounces off low on hopes for demand boost from China stimulus Iranian oil exports drop further
Ginger Lawrence | 09 October, 2018, 18:37

"Despite the mischief of the Americans, Iran's oil exports have surpassed state budget outlay projections", Vice President Es'haq Jahangiri said last week.

Two companies in India, a big buyer of Iranian oil, have ordered barrels in November, India's oil minister said on Monday.

Pradhan reportedly said Monday that India does not know if it would get a waiver from the U.S.

Indian Oil Corp will lift 6 million barrels of Iranian oil and Mangalore Refinery and Petrochemicals Ltd 3 million barrels, the source told Reuters. US sanctions targeting Iran's crude oil exports come into effect on November 4.

U.S. president Donald Trump in May withdrew from the 2015 nuclear accord with Iran, re-imposing economic sanctions against the Persian Gulf nation.

In the previous round of sanctions from 2012 to 2015, India continued to buy Iranian crude although it had to cut purchases significantly to protect its wider exposure to the US financial system.

He said: "We expect the global leadership to acknowledge India's need for Iran's oil". Pradhan said India has its own energy requirements which need to be fulfilled.

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Sanctions against Iran will block payment routes for India through the U.S. dollar.

But Iran, OPEC's third-largest producer, has repeatedly said that its oil exports can not be reduced to zero because of high demand levels in the market and has blamed Trump for an oil price rally caused by imposing sanctions on Tehran.

Iran says its oil flow to the market should not be hampered no matter what as Western oil news and information providers are steadily claiming declines in Iran's exports, putting them at about 1.7 million bpd ahead of the sanctions.

Delhi is hopeful that Saudi Arabia and other members of the Organization of Petroleum Exporting Countries will heed United States calls for production to be boosted by one million barrels per day, as promised in June, which might help bring benchmark prices down. The bulk of spare capacity is held by Saudi Arabia. Major oil trading houses predicted that Brent, the global oil benchmark, was likely to hit $100 a barrel in late 2018 or early 2019.

Crude oil prices softened on October 5 to close around the $83/billion barrels (bbl) mark after rising to $86/bbl.

Pradhan said he had urged Saudi Arabia's oil minister to keep in mind the interests of oil consuming countries when it came to higher prices.

Moody's Investors Service in a report on Monday said the government's decision was credit negative for Indian state-owned oil marketing companies IOC, BPCL and HPCL. It added that the effective reversal of fuel price deregulation would also constrain future private sector investments in the sector.