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Thread: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and Euro

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  1. #1
    Senior Member Amjad Hussain's Avatar
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    As clock ticks down on sanctions, oil-laden Iran tankers set to target India and Euro

    SINGAPORE: With Iran poised to resume usual business ties with the world under a historic nuclear deal, Tehran is set to target India, Asia's fastest-growing major oil market, and old partners in Europe with hundreds of thousands of barrels of its crude.

    Iran expects the United Nations (UN) nuclear watchdog to confirm on Friday it has curtailed its nuclear programme, paving the way for the unfreezing of billions of dollars of assets and an end to bans that have crippled its oil exports.

    Tehran plans to lift exports by 500,000 barrels per day (bpd) post-sanctions and gradually raise shipments by the same amount again, adding to a glut of global oil and likely putting more pressure on oil prices which have already dropped 70 per cent since 2014 to around $30 per barrel.

    Iran has 22 Very Large Crude Carriers (VLCC) floating off its coast, with 13 fully or almost fully loaded, mapping data on Thomson Reuters' Eikon showed, carrying enough crude to meet India's import needs for almost a week.

    A senior Iranian source close to supply negotiations said that the country ─ which has the world's fourth-biggest proven oil reserves ─ was targeting India as its main destination for crude.

    "Indian crude demand is growing faster than other Asian countries. Like our competitors, we see this country as one of the main targets for Asian sales," said the official, who spoke on condition of anonymity.

    Iran hopes to raise its exports to India by 200,000 bpd, up from the 260,000 bpd currently shipped under sanctions' restrictions, the official said.

    At the right price, Indian refiners said they were keen to import more from Iran, as the country's demand for fuel soars on the back of 10pc annual growth in car sales, a rate that is now faster than China's.

    "We have a long-lasting relationship with Iran and post lifting of sanctions we will evaluate the scenario," said L K Gupta, managing director of India's Essar Oil.

    "It makes sense to buy oil from nearby options (like Iran)," said H. Kumar, managing director of another Indian oil firm, Mangalore Refinery and Petrochemicals, but added "intake will depend on prices".

    The Iranian official said there was not much room for major export increases to China, South Korea or Japan due to slowing demand and also because of a shift there towards more non-Middle East crudes.

    A South Korean refinery source confirmed he did not expect a big increase in Iranian supplies, largely because of plentiful alternatives.

    A Japanese refiner said that his firm could only take Iranian deliveries once it had insurance in place, which could take time.
    Old European partners

    Iran already trades limited amounts of oil mainly with Asian buyers legitimately under sanctions, but its crude exports have fallen to just over 1 million bpd, down from a peak of over 3 million bpd in 2011, pre-sanctions.

    The Iranian official said Tehran planned to revive supply deals with European partners in order to ramp up exports.

    Shipping industry association BIMCO confirmed that European clients would be among the first post-sanction clients.

    "Former clients of Iran are the ones who are likely to return as buyers... Italy, Spain and Greece were the top EU importers in 2011," said Peter Sand, BIMCO's chief shipping analyst.

    Following years of under-investment, Iran needs foreign cash to modernise its creaking oil industry.

    Italy's ENI, Spain's Repsol and France's Total were some of the companies with the biggest delegations at a conference in Tehran last November, during which Iran published new terms for foreign oil investors.

    Prospects for exports to the Americas, never a significant market for Iran, appear slim. Not only do United States (US) sanctions unrelated to the nuclear issue remain in effect, but the region is already inundated with supply from soaring US and Canadian production.
    Cut-throat market

    In a cut-throat market, Iran may also find it difficult to sell its oil as the heavy grades it mostly offers are in low demand.

    Latin American suppliers who produce similar heavy crudes have been seeking new buyers in Asia.

    Within the Middle East, traders said Iran's main competitor would be Iraq, which has successfully returned to Asian markets in recent years, with exports rising above 3.5 million bpd.

    In Europe, traders said Iran's crude would compete mainly with Russian Urals grades, which are competitively priced.

    In China and India, strong passenger car sales are fuelling gasoline demand, while a slowdown in Asia's heavy industries means slower demand for diesel, which heavy crudes are often used to produce.

    Iran does have light crudes, but needs them for itself to reduce gasoline imports.

    Either way, Iran adding to an oversupplied global oil market is bound to put more pressure on prices. "With Iran's sooner return... there is still further downside risk to prices this quarter," Barclays bank said.
    The Following User Says Thank You to Amjad Hussain For This Useful Post: Mohan Tiwari


  2. #2
    Senior Member Greenstar's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    I wonder if all the accounts will be also unfrozen?

  3. #3
    Senior Member Mohan Tiwari's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    Quote Originally Posted by Greenstar View Post
    I wonder if all the accounts will be also unfrozen?
    From next week--Sanction are off---

    Iran may be sell their residual oil to India if they can promise to trade 40% in Indian rupee -They can buy Indian steel and other raw materials in exchange

    http://fortune.com/2015/06/19/india-oil-import/

    India overtook Japan to become world's third biggest oil importer.
    According to http://oilprice.com/Energy/Crude-Oil...-Importer.html
    India could provide a huge source of demand growth, with its additional demand for 2015 (perhaps as much as 300,000 barrels per day) potentially surpassing China’s (295,000 barrels per day). China, for so many years, has been the driver of oil markets.

    IOCL 200,000 barrel refinery will start operation from next month which will take India's daily usage to 5 million Barrel/day


    http://www.business-standard.com/art...1300717_1.html

    Prime Minister, Narendra Modi, will inaugurate it on February 7. The 15-million-tonne Paradip refinery of Indian Oil Corporation (IOCL), the largest in the eastern coast,

  4. #4
    Senior Member Mazea's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    Quote Originally Posted by Mohan Tiwari View Post
    From next week--Sanction are off---

    Iran may be sell their residual oil to India if they can promise to trade 40% in Indian rupee -They can buy Indian steel and other raw materials in exchange

    http://fortune.com/2015/06/19/india-oil-import/

    India overtook Japan to become world's third biggest oil importer.
    According to http://oilprice.com/Energy/Crude-Oil...-Importer.html
    India could provide a huge source of demand growth, with its additional demand for 2015 (perhaps as much as 300,000 barrels per day) potentially surpassing China’s (295,000 barrels per day). China, for so many years, has been the driver of oil markets.

    IOCL 200,000 barrel refinery will start operation from next month which will take India's daily usage to 5 million Barrel/day


    http://www.business-standard.com/art...1300717_1.html
    Before India can trade with Iran, they have to pay the funds they have still got in their account. They have outstanding balance.

  5. #5
    Senior Member Mohan Tiwari's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    Quote Originally Posted by Mazea View Post
    Before India can trade with Iran, they have to pay the funds they have still got in their account. They have outstanding balance.
    Shouldn't be problem once sanctions are lifted!


    http://www.reuters.com/article/us-ir...-idUSKCN0UT098
    Iran oil headed for India, Europe, with sanctions lifting
    Fri Jan 15, 2016

    With Iran ready to resume business as usual with the world under a historic nuclear deal, Tehran will target India, Asia's fastest-growing major oil market, and old partners in Europe with hundreds of thousands of barrels of its crude.

    Iran expects the United Nations nuclear watchdog to confirm on Friday it has curtailed its nuclear program, paving the way for the unfreezing of billions of dollars of assets and an end to bans that have crippled its oil exports.

    Tehran plans to lift exports by 500,000 barrels per day (bpd) post-sanctions and gradually raise shipments by the same amount again, adding to a global glut and likely putting more pressure on oil prices which have already dropped 70 percent since 2014, to below $30 per barrel.

    Iran has 22 Very Large Crude Carriers (VLCCs) floating off its coast, with 13 fully or almost fully loaded, mapping data on Thomson Reuters' Eikon showed, carrying enough crude to meet India's import needs for almost a week.

    A senior Iranian source close to supply negotiations said that the country - which has the world's fourth-biggest proven oil reserves - was targeting India as its main destination for crude.

    "Indian crude demand is growing faster than other Asian countries. Like our competitors, we see this country as one of the main targets for Asian sales," said the official, who spoke on condition of anonymity.

    Iran hopes to raise its exports to India by 200,000 bpd, up from the 260,000 bpd currently shipped under sanctions' restrictions, the official said.

    At the right price, Indian refiners said they were keen to import more from Iran, as demand for fuel soars on 10 percent annual growth in car sales, a rate that is now faster than China's.

    "We have a long-lasting relationship with Iran and post lifting of sanctions we will evaluate the scenario," said L K Gupta, managing director of India's Essar Oil.

    "It makes sense to buy oil from nearby options (like Iran)," said H. Kumar, managing director of another Indian oil firm, Mangalore Refinery and Petrochemicals, but added "intake will depend on prices."

    The Iranian official said there was not much room for major export increases to China, South Korea or Japan due to slowing demand and also because of a shift there towards more non-Middle East crudes.

    A South Korean refinery source confirmed he did not expect a big increase in Iranian supplies, largely because of plentiful alternatives.

    A Japanese refiner said that his firm could only take Iranian deliveries once it had insurance in place, which could take time.

  6. #6
    Senior Member Mazea's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    Quote Originally Posted by Mohan Tiwari View Post
    Shouldn't be problem once sanctions are lifted!


    http://www.reuters.com/article/us-ir...-idUSKCN0UT098
    Iran oil headed for India, Europe, with sanctions lifting
    Fri Jan 15, 2016
    I had this conversation 3 months ago. You have had the oil, sanctions which were illegal have been lifted. Even the UK have unfrozen the funds. India is behaving like a beggar and not paying up. Pay what is due.

  7. #7
    Senior Member Mohan Tiwari's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    Quote Originally Posted by Mazea View Post
    I had this conversation 3 months ago. You have had the oil, sanctions which were illegal have been lifted. Even the UK have unfrozen the funds. India is behaving like a beggar and not paying up. Pay what is due.
    Why do you think that 100 bill$ Iranian money are still blocked as we speak.
    http://www.theguardian.com/world/201...t-happens-next
    EU and US poised to lift Iranian sanctions this weekend
    Wednesday 13 January 2016 18.53 GMT

    The European Union and US are expected to formally lift sanctions against Iran this weekend, dismantling an intricate network of punitive measures built up over nearly a decade and reconnecting Tehran to the global economy.

    http://news.yahoo.com/factbox-u-eu-u...225420430.html

    Factbox: U.S., EU, U.N. close to lifting Iran sanctions. Here's how it will work

    The United States and the European Union both took formal legal steps in October to lift sanctions on "implementation day" - the day Iran meets all conditions under the deal.

    That is expected to happen in the next few days, Iranian and Western officials said. The green light to lift sanctions will come via a report the International Atomic Energy Agency (IAEA) will send to its governing board and the U.N. Security Council verifying Iran's compliance with its obligations under the deal.

  8. #8
    Member Enigma's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    I think I read somewhere that it will take Iran some 6 months to ramp up production. Initially the ramp up will be about 100000 barrels a day

  9. #9
    Senior Member Greenstar's Avatar
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    Re: As clock ticks down on sanctions, oil-laden Iran tankers set to target India and

    Quote Originally Posted by Mazea View Post
    I had this conversation 3 months ago. You have had the oil, sanctions which were illegal have been lifted. Even the UK have unfrozen the funds. India is behaving like a beggar and not paying up. Pay what is due.
    Don't call anyone a beggar bro

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