Top oil traders say Iran sanctions hit harder than expected
October 11 2018 09:55 PM
RELATED STORIES
GULF TIMES
A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag (file). Efforts by the European Union to preserve the international nuclear deal with Iran by setting up a payment mechanism to circumvent US sanctions won’t help oil buyers, say trading-house executives.

Bloomberg/London

Sanctions on Iranian oil exports are hitting much harder than most people predicted as the administration of US President Donald Trump takes a tough line on enforcement, said executives from the world’s largest energy traders.
Perhaps 2mn bpd of Iranian crude could eventually be lost to the global market, said Jeremy Weir, chief executive officer of Trafigura Group Pte. While other traders including Vitol Group of Cos and Gunvor Group saw the impact closer to 1mn, that’s still twice as much as most people initially predicted.
“Iranian exports of crude oil will be much reduced,” Vitol chairman Ian Taylor said in a Bloomberg television interview. That’s largely the cause of the severe “fear factor” in the crude market that’s driven prices up to $85 a barrel, he said.
The traders speaking at the Oil and Money conference in London on Wednesday, which included Gunvor CEO Torbjorn Tornqvist and Glencore Plc’s head of oil and gas Alex Beard, weren’t universal in their predictions for prices. Crude futures at $100 or higher were possible by year-end, said Tornqvist, while Taylor saw the market drifting $5 or $10 lower by January.
“We don’t have a supply squeeze, there’s plenty of oil around” right now despite the sanctions, said Taylor. With current prices, demand could start to weaken, he said.
Efforts by the European Union to preserve the international nuclear deal with Iran by setting up a payment mechanism to circumvent US sanctions won’t help oil buyers, the trading-house executives said.
“I don’t see any chance that the European payments mechanism on Iran could work,” said Beard. When asked if there was anything that would tempt oil traders to skirt US sanctions, such as the oil market tightening significantly or Tehran offering discounts, Taylor was emphatic: “No, no, and no.”






There are no comments.

LEAVE A COMMENT Your email address will not be published. Required fields are marked*
MORE NEWS