Oil & Energy

Google Ad

Iran is seeing the benefits from cutting it's crude oil prices to gain market share. Iranian crude exports to China may rise to the highest in 11 months in August two tanker sources told Reuters on Thursday. Iran crude and condensate exports to China are seen at 733,000 barrels per day (bpd) in August. This would be a 11 percent rise in crude volumes month-on-month.

Iran cut the official selling prices of the heavier grades, Iranian Heavy and Forozan Blend in Q3 by 2 cents a barrel from Q2. Iran has benefited from the Russian and OPEC cuts and supply problems in Venezuela.  Iran was exempted from the OPEC deal. In this period we have also seen the Dubai price benchmark weaken against Brent. 

Iran plans to raise oil output by about 200,000 bpd to around 4 million bpd by the end of 2017. 

Overall Iranian crude exports in August for Asia are set to fall to 1.3 million barrels per day (bpd), down 0.3 percent from July the Reuters source said. Iran's global combined crude oil and condensate exports may total 2.37 million bpd this month, down 4 percent from a year earlier, which would mark the first year-on-year decline in four months.

Loadings to India will drop 25 percent from July to 310,000 bpd this month. This would be the lowest since February 2016 which Reuters sees as a possible retaliation for Tehran not awarding a gas field development to Indian companies. During Q3 Indian refiners entered the spot market buying sour crude from Abu Dhabi, Oman and Russia. 

South Korea in August will pass India as the second-biggest buyer of Iranian crude for the first time since January 2016, taking nearly 380,000 bpd, Reuters source said.

Crude and condensate exports

  • Asia rising 5 percent from July to almost 1.65 million bpd
  • Europe falling 15 percent from previous month to 613,000 bpd.
  • Exports to the Middle East are staying little changed at 111,000 bpd.

Taiwan is buying Iranian oil this month for the first time since April, totaling 2 million barrels, said the source. Japan is buying 157,000 bpd, up 6 percent from July.

In Europe, Turkey will take 258,000 bpd, up 7 percent from July, while Italy will take 129,000 bpd, steady from last month.

In the Middle East, the United Arab Emirates will take 111,000 bpd, up 3 percent from July. Iran is also putting 2 million barrels into its offshore storage facility according to the source.

Iran has been aggressive since sanctions to both increase market share and increase market share. It will be interesting to see if the Indian situation returns to normal.

Source: Reuters

From the TradersCommunity Research Desk

Log in to comment
Discuss this article in the forums (3 replies).