Arab Today, arab today oil market doing what comes naturally
Last Updated : GMT 17:26:21
Arab Today, arab today
Arab Today, arab today

Oil market doing what comes naturally

Arab Today, arab today

Arab Today, arab today Oil market doing what comes naturally

Tehran - Arabstoday

For all the headlines over the threat to oil shipments from Iran as Western sanctions ramp up, it seems the crude market is doing what it does best: getting on with business. That is to say both buyers and sellers are adapting to the new realities and seeking to maximise their advantage while ensuring that everybody gets the oil they need. Take the Chinese for example. They are the top buyers of Iranian crude, usually taking about 20 per cent of the Islamic republic\'s exports, or some 550,000 barrels a day. But this was cut by 285,000 barrels a day in January and February, and according to sources the Chinese will extend the reductions for a third month in March. At the same time China\'s refiners appear to be putting the knife into Iran, presumably as they seek better terms, the nation\'s political leaders are saying the West should back off from Iran and that putting sanctions on the oil trade isn\'t the solution to the nuclear problem. What this shows is that China is seeking to maximise its own position in the situation. It cannot stop Europe and the US from trying to end Iran\'s nuclear programme, but China can benefit from the process. And it would be wrong to think the Chinese are alone in this: virtually everybody in the physical oil markets is also trying to work out how best to profit. Record amounts of West African crudes will be shipped to Asia in the first quarter, with estimates reaching 1.82 million barrels a day, up from 2011\'s average of 1.57 million. Russia, the world\'s top oil producer, is also eyeing selling more oil in Asia, adding to its existing market for its Eastern Siberian Pacific Ocean (ESPO) crude. Indian refiners, the second-largest buyer of Iranian oil last year at 341,000 barrels a day, are apparently happy to keep buying, but at the same time making it clear the Iranians will have to keep their prices low in order to get the business. It\'s also likely that Saudi Arabia is seeking to maximise its position as the world\'s top exporter. What this tells you that behind the drama of the news headlines, the oil market is getting on with the job. The main impact of the headlines seems to be in the paper market, where oil futures have been rallying, with front-month Brent up 12 per cent since mid-December to trade near its highest level in six months. What\'s driving the oil price higher doesn\'t appear to be extra demand, with expectations that the International Energy Agency will this week trim its demand growth forecast for 2012 to as little as 300,000 barrels a day. With Europe staring at recession, if not already there, a slow recovery in the US and an easing of growth in Asia, it\'s hard to be bullish on the oil price in the short term based on fundamentals. It\'s also not hard to see the Iran premium remaining in the oil price for months to come. The West seems determined to hurt Iran economically with sanctions that make it difficult to pay for oil, while equally, the authorities in Tehran seem determined to maintain their nuclear programme is for electricity only, while vowing to continue its development. If you look at the history of similar conflicts, there are a variety of ways that the Iranian situation can reach end game. The real problem for the oil market would be if tensions erupted into full-scale war, with the Western powers and Israel attacking Iran, and Iran doing its best to shut down the Strait of Hormuz, through which 20 per cent of the world\'s oil passes. The more likely scenario, for the time being, is that matters escalate until the pain becomes too much for somebody to bear. In practical terms, this could be the West backing down if Iran manages to withhold its oil for long enough to cause economic agony in what is, after all, an election year in the US and France. Alternatively, the sanctions and economic hardship in Iran could result in its own internal conflicts coming to the fore in the form of some sort of regime change, followed by a compromise with the West. In all but the all-out war scenario, the physical oil market will be able to fairly quickly adjust, in fact, there may even be too much crude floating around as the Iranians will no doubt try to continue selling. 

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*

Arab Today, arab today oil market doing what comes naturally Arab Today, arab today oil market doing what comes naturally

 



Arab Today, arab today
Arab Today, arab today Prepares to present her new collection

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today 11 family members dead in rebel push

GMT 07:57 2017 Tuesday ,21 February

11 family members dead in rebel push
Arab Today, arab today To probe sexual harassment claims

GMT 10:08 2017 Tuesday ,21 February

To probe sexual harassment claims

GMT 14:57 2017 Monday ,20 February

A giant initial public offering on track

GMT 14:50 2017 Monday ,20 February

Energy Market Research

GMT 09:38 2017 Monday ,20 February

Japan returns to trade deficit in January

GMT 07:16 2017 Monday ,20 February

Global arms trade highest since Cold War

GMT 06:10 2017 Monday ,20 February

Tourism shows signs of recovery in Egypt

GMT 05:45 2017 Monday ,20 February

Brexit U-turn ruled out by many in EU
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today 57 monkeys carrying 'invasive' genes

GMT 16:00 2017 Tuesday ,21 February

57 monkeys carrying 'invasive' genes
Arab Today, arab today 63-Year-Old Woman Delivers Baby

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby
Arab Today, arab today Small ponds have outsized impact

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Ahmed Fahmy stresses he did not ignore singing

GMT 06:34 2017 Sunday ,19 February

Ahmed Fahmy stresses he did not ignore singing
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 14:51 2017 Monday ,20 February

Ways to acquire presentation skills

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome
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