fortuitous easing of iran crude worries
Last Updated : GMT 01:03:47
Arab Today, arab today
Arab Today, arab today

Fortuitous easing of Iran crude worries

Arab Today, arab today

Arab Today, arab today Fortuitous easing of Iran crude worries

London - Arabstoday

Through a combination of somewhat fortuitous factors, the imminent imposition of Western sanctions on Iran is shaping up as a bit of a non-event for Asian crude buyers. The US and European measures that start late this month and next aim to halt Iranian shipments of oil to Europe and impact those to the rest of the world by limiting the ability to pay or insure cargoes. But far from being a major worry for Asia, replacing much of the about 1.5 million barrels day that the region used to buy from Tehran has been fairly easy. Fortuitous factor number one is Greece, or more specifically the economic woes in Europe caused by the ongoing sovereign debt crisis that is at its worst in the Mediterranean nation. There is some irony insofar as a weakening economic outlook has actually helped Europe achieve its aim of keeping oil prices under control even as it plans to shut off imports from Iran, which totalled 740,000 barrels a day last year. It is probably a moot point as to whether Europeans would prefer a stronger economic outlook and Brent crude near the $130 a barrel mark it neared in March, or the current weaker prognosis and Brent at its present level just under $100. But what is certain is that the fear over the oil supply-demand balance because of the likely loss of much of Iran’s 2.3 million barrel a day export capacity has largely dissipated. Fortuitous factor number two is the faster-than-forecast slowing in China’s economic growth rate, which is manifesting itself in weaker commodity imports. Chinese crude imports were robust in the first quarter, with each month above 23 million tons, a level higher than the previous record high in September 2010. Imports eased in April to 22.26 million tons, and are likely to slip further in the next two to three months on lower refinery runs and softer demand growth. Again, it’s unlikely that the world economy is better for the slower growth rate in China, but there is little doubt that economic concerns have replaced supply concerns as far as crude markets are concerned. And herein lies the risk for crude markets. It seems that oil prices have become less reliant on the old supply and demand fundamentals and more linked to the prevailing global economic outlook and sentiment. And sentiment can swing quite dramatically: look at the swift changes in directions for equity prices based on little more than news headlines following every twist and turn of the Greek debt crisis and its implications for the euro zone. What this means is that the factors that drove Brent below $100 are purely serendipitous and can easily reverse over the rest of the year. If one assumes that Europe will, at the least, be able to manage its crisis and that the Chinese authorities can successfully re-ignite growth in the second half of 2012, it’s also reasonable to assume that oil prices will rise as well. But in the meantime the loss of Iranian cargoes isn’t the problem that many feared it would be, with buyers able to source alternative supplies. Purchases from South Korea, which bought about 230,000 barrels a day of Iranian crude last year, will probably drop to zero after July, according to industry sources. Japan has also curbed its purchases and is struggling to arrange insurance cover for cargoes due to the EU ban on reinsurers based in the continent from providing coverage. China remains the best hope for Iran to maintain a customer in Asia, given Beijing’s opposition to sanctions, but even the Chinese are struggling to arrange insurance and payment for cargoes. However, assuming European imports from Iran do stop altogether after July, Iran is likely to be able to export about half of daily capacity. This represents a revenue loss of about $115 million day, or about $20 billion for the second half of 2012. Whether this is enough to force the Iranians to compromise over their nuclear program remains to be seen. If Tehran does reach an agreement in talks with the US, France, Britain, Germany, Russia and China, and Iranian oil flows again in the second half, it would most likely result in an oversupply of crude, perhaps just in time to meet returning Chinese demand. from arab news.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

fortuitous easing of iran crude worries fortuitous easing of iran crude worries

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

fortuitous easing of iran crude worries fortuitous easing of iran crude worries

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Banyan Tree Phuket Takes Festive Season

GMT 01:34 2017 Friday ,17 November

Banyan Tree Phuket Takes Festive Season
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Israel ready to cooperate with Saudi

GMT 06:31 2017 Friday ,17 November

Israel ready to cooperate with Saudi
Arab Today, arab today Top Democrat faces investigation

GMT 09:50 2017 Friday ,17 November

Top Democrat faces investigation
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today Angola oil boss sacked by father's protege

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Baidu speeds up AI progress

GMT 11:46 2017 Friday ,17 November

Baidu speeds up AI progress
Arab Today, arab today Urban, young and active?

GMT 11:01 2017 Thursday ,16 November

Urban, young and active?
Arab Today, arab today Ayten Amer happy for “The Flood” success

GMT 08:06 2017 Wednesday ,15 November

Ayten Amer happy for “The Flood” success
Arab Today, arab today Unloved vultures fight for their survival

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 08:21 2017 Tuesday ,14 November

Nelly Karim focuses on humanitarian roles

GMT 09:23 2017 Wednesday ,15 November

Years melt away as Bening & Bell play unlikely lovers

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 13:40 2017 Monday ,13 November

Pollution spikes in Delhi amid warnings

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 10:55 2017 Thursday ,16 November

UN warns fuel running out

GMT 01:04 2017 Wednesday ,15 November

In Morocco, a blue tourist town

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday