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U.S. Resumes "Most Urgent" on Iran

  • Author:Alvin
  • Source:HKSG-GRUP
  • Release Date:2018-05-10
U.S. Resumes "Most Urgent" on Iran

Shipping Information 2018-05-10
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Abstract Shipping Newsletter featured news sections, presenting you with daily logistics focus news: The United States resumed its “Most Mandatory Disciplinary” against Iran; China banned the import of waste ships from 2019; COSCO Shipping and merchant ships Mitsui jointly developed Arctic LNG shipping channels; The accuracy rate of the first quarter of sea shipping was 80.6%.

U.S. Resumes "Most Urgent" on Iran

U.S. President Trump recently announced that the United States has withdrawn from the Iranian nuclear agreement and will adjust Iran’s economic sanctions to “the highest level”.

Iran’s crude oil exports to China, even Asia, Europe and other regions may also be affected. Although Europe did not fight side by side with the United States this time, after the United States opened the sanctions, crude oil importers may have to choose between Iran and the United States crude oil.

Buyers have begun to make second-hand preparations. Reuters quoted Japanese and South Korean refiner sources that they are already preparing to look for Iranian alternatives to deal with potential sanctions.

The report also mentioned that Chinese oil refiners believe that the import of Iranian crude oil is not large, and it is easy to find alternatives in Russia, Saudi Arabia, West Africa and the United States.

In 2012, the United States and Europe opened sanctions against Iran and restricted Iran’s crude oil exports. This drastically reduced Iran’s daily crude oil exports from 2.5 million barrels to 1 million barrels, mainly to China, India, Japan, and South Korea.

Iran's current crude oil production is about 3.8 million barrels a day, and its daily export volume is 2.2 million barrels. After the United States withdrew from the Iranian nuclear agreement, it has granted a grace period of 90-180 days for different industries to impose sanctions on Iraq. The transition period for oil-related sanctions is 180 days.

The impact of restrictions on the export of Iranian crude oil to the global crude oil supply will not appear for the time being in half a year.

Iranian crude oil is mainly exported to Asia. China, India, South Korea and Japan are the main buyers. Asian buyers have drastically increased their imports from Iraq before the start of the sanctions. Reuters data showed that China's crude oil imports from Iran increased by 16% in March this year; Platts Energy said that in April India's crude oil imports from Iran soared by nearly 60%.

However, crude oil imports from Iran do not account for a large proportion of China’s crude oil imports. April data showed that China’s crude oil imports in April were about 9.6 million barrels per day. According to Platts predicted data, China's crude oil imported from Iran (714,000 barrels per day) accounted for only 7.4% in April.

In Europe, due to the fact that Europe did not stand firm in the United States while sanctions against Iran, the impact on Iran’s crude oil exports remains to be seen. British Prime Minister May said that Trump’s decision to withdraw from Iran’s nuclear agreement is regrettable.

For Europe, Iran’s crude oil prices are still very competitive relative to Iraq, Russia, or Saudi Arabia.