Wednesday, February 8, 2023
spot_img
HomeHeadlinesTankers May Get Sudden Boost If Iran Nuclear Deal Is Reached -...

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Tankers May Get Sudden Boost If Iran Nuclear Deal Is Reached – report

Progress toward an Iranian nuclear deal has thrown the spotlight onto a sizeable cache of crude held by Tehran that could be swiftly dispatched to buyers in the event an agreement gets hammered out.

About 93 million barrels of Iranian crude and condensate are currently stored on vessels in the Persian Gulf, off Singapore and near China, according to ship-tracking firm Kpler, while Vortexa estimates the holdings at 60 to 70 million barrels. In addition, there are smaller volumes in onshore tanks.

“Iran has built up a sizable flotilla of cargoes that could hit the market fairly soon,” said John Driscoll, chief strategist at JTD Energy Services. Still, he said it may take “a bit of time” to iron out insurance and shipping issues, as well as spot and term sales post-sanctions.

The possible full readmittance of Iran to the global crude market, with the potential lifting of US sanctions, comes at a complex moment for oil traders. Investors are juggling the countdown toward far tighter European Union curbs on Russian crude flows from December as part of the bloc’s pushback against the war in Ukraine. In addition, the Biden administration’s mammoth sale from the Strategic Petroleum Reserve will end in October.

The potential return of Iranian barrels into global oil markets — both from the volumes in floating storage and over the longer term — has weighed on futures prices in recent weeks, offsetting signs of tightness elsewhere.

The focus for diplomats is the revival of a multinational accord that limited Iran’s nuclear program in exchange for the lifting of related sanctions, including on oil flows. The original deal collapsed after then-President Donald Trump abandoned it. Last week, the US sent its response to the latest proposal, boosting speculation an agreement may soon be struck, although Tehran said Sunday that exchanges will now drag on into September.

Iran’s offshore crude hoard compares with the average daily global supply this year of about 100 million barrels a day, according to an estimate from the International Energy Agency. In the US, President Joe Biden has been releasing about 180 million barrels from the SPR over a six-month period.

Since former President Trump stopped granting waivers to import Iranian oil following American sanctions, Iran’s daily shipments have held at about 1 million barrels, according to Emma Li, an analyst at Vortexa. China has remained among the top buyers, as other nations backed away.

The current volume of crude and condensate in onshore storages within Iran is estimated at about 48 million barrels, Kpler data showed, adding that the producer could be holding even more oil in some land storages around China.

Longer term after any deal is struck and the offshore cache is drained, Iran would seek to rebuild production and step up overseas sales. Goldman Sachs Group, which is skeptical about a breakthrough in the near term, said even if a deal is reached, these won’t begin until 2023, according to a note.

While Iran may aim to fill the void left by Russia in Europe, namely in Spain, Italy, Greece, and even Turkey, Tehran would also attempt to reclaim its share in the prized Asian market, even if it takes a sweetening of terms, Driscoll said.

In 2017 and 2018, Europe consumed an average of 748,000 barrels and 528,000 barrels a day of Iranian oil, respectively, while Asia took 1.2 million and close to 1 million barrels a day, Kpler data showed.

“It’s natural for Iran to want to supply Europe first to fill in the hole left by post-invasion sanctions against Russia,” Driscoll said. “But in the longer run, they will be looking to place their barrels under long-term deals in Asia.”

Source: Bloomberg

Related Posts

Video

Finance & Economy
Shipping News
Ports

Royal Caribbean set for record bookings after smaller loss

Royal Caribbean Group reported fourth quarter 2022 Loss per Share of $(1.96) and Adjusted Loss per Share of $(1.12). These results exceeded the company's...

Frontline: Emergency Arbitration claims initiated by Euronav fully dismissed

Frontline plc, formerly Frontline Ltd., announces that the Emergency Arbitration claims filed by Euronav have been fully dismissed by the Emergency Arbitrator. The decision was...

DP World reports solid volume performance in 2022

DP World Limited handled 79.0 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in full year 2022, with gross container...

LNG boosts CPLP 2022 results

Capital Product Partners L.P. released its financial results for the fourth quarter ended December 31, 2022. Highlights  Three-month periods ended December 31, 20222021Increase/(Decrease)Revenues$79.9 million$63.6 million26%Expenses$42.1 million$35.7...

Keppel Corp posts 9% drop in full-year profit

Singapore’s Keppel Corp said on Thursday its net profit for the year fell 9%, partly hurt by weak performance from its urban development business...

Royal Caribbean set for record bookings after smaller loss

Royal Caribbean Group reported fourth quarter 2022 Loss per Share of $(1.96) and Adjusted...

Baltic Index Extends Fall On Lower Rates For Panamax, Supramax

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index hits nearly three-year low on weaker vessel demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index hits over 2-year trough on waning demand for larger vessels

The Baltic Exchange’s dry bulk sea freight index dropped to its lowest level in...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury...

Clarkson Port Services acquires offshore renewable energy service provider, DHSS

Clarkson announced that its wholly owned subsidiary, Clarkson Port Services, has completed the acquisition of DHSS, a leading provider of integrated logistics services to...

DP World reports solid volume performance in 2022

DP World Limited handled 79.0 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in full year 2022, with gross container...

DP World wins bid for development of a mega-container terminal at India’s Deendayal Port

DP World has won a major concession to develop, operate and maintain the mega-container terminal at Deendayal port in Gujarat, on the western coast...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury cruising will be one of the main highlights of the...

Port of Los Angeles proposes cruise terminal project

The Port of Los Angeles is inviting comments on a draft Request for Proposals (RFP) for the future development of a new Outer Harbor...