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Iran May Lose More Than Half a Million bpd in Oil Exports - Expert |
26 June 2012Iran may lose as much as half a million bpd of its oil exports if the current situation continues, EU economic advisor Mehrdad Emadi told Trend.
The expert was commenting on the ongoing oil export difficulties that Iran is experiencing, due to imposed sanctions from both the U.S. and the EU.
"Given the decline in the purchase of crude oil as reported by South Korea, Japan, India and if we assume the continuation of the declined by the Chinese, it may be possible to see a fall of more than half a million barrels of oil a day in the purchase of oil by these four economies from Iran," Emadi said.
Tehran's top customers, China, Japan, South Korea and India, have all cut imports this year as sanctions make it impossible to finance the deals, find tankers and arrange insurance cover to ship the crude.
As the EU embargo on Iran's oil becomes active on July 1, those who depend heavily on Iranian oil look for other alternatives.
For example, Japan has secured a parliament approval that allows the government to provide insurance cover for imports of Iranian oil.
"Should the coordinated stances of the U.S. and the EU continue and Japan shows a stronger support for the new measures against the export of oil by Iran, a 30 percent reduction in exports to these four economies (S. Korea, Japan, India, China) accompanied with greater reductions in oil purchase by Turkey and Greece, can reduce Iran's earnings by more than 30 percent which will make it very difficult for Iran to sustain its existing level of foreign trade and domestic consumption," Emadi noted.
Advisor added that this situation may induce Iran to impose rationing in some areas to reduce its foreign currency needs and manage the shortages that may arise in future.
On June 12, U.S. officials said India, South Korea, Turkey, Taiwan, Malaysia, South Africa and Sri Lanka had reduced their purchases of Iranian crude sufficiently to cut Tehran's exports without upsetting global oil prices.
In March, the Obama administration similarly exempted 10 European countries and Japan from sanctions, saying they too had done enough to wean themselves from Iranian energy.
Two importers of Iranian oil that have not yet been granted exemptions are China and Singapore.
A year ago, the Islamic Republic of Iran was selling around two-thirds of its crude exports, or roughly 1.45 million bpd, to its biggest Asian buyers.
The International Energy Agency said last week that Iran's crude exports in April and May have fallen by 1 million bpd since the end of 2011 to 1.5 million bpd and that Tehran may need to shut in production.
Asia needs oil to feed growing demand and top consumers are reluctant to entirely halt imports from Iran and depend entirely on top exporter Saudi Arabia, especially given that output from other alternative suppliers such as Libya and Iraq has not stabilized.
Trend S.Isayev |
26 June 2012
trend AZ
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