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Sanctions Lifted for Iran Crude Oil, Insurance Available

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Iran crude oil is facing difficulties in sales as sanctions will soon be lifted. Asian countries start to lose their interests.

 

After more than 20 months of negotiation, Iran and world power finally came to terms of lifted sanctions to be implemented soon. As the new spreads, Asian refiners rush to buy the last deal of cheap crude oil from Iran.

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In an abundant oil market, it seems difficult enough for Iran to maintain its customers. This new increase in sanctions can be a heavier penalty to the country, forcing it to compete with a relatively high price compared to Africa and South America.

 

Iran’s four main destinations for crude oil are China, India, Japan and South Korea. These 4 countries have been loyal customers with great demand to Iran’s crude oil since 2012. Asia in total have been buying 1.2 million barrels per day from Iran, with China remains the top customer. In the meantime they are all having different opinions about Iran’s new sanctions.

 

The decisions partly depend on the nuclear deal starring Iran, as an India’s official has put it, “If the nuclear deal permits, we will increase our purchases”. Meanwhile, Hindustan Petroleum Corp Ltd. In Mumbai insists on insurance for their refineries & discounts on sales & shipments.

 

Traders in China, South Korea and Japan are still interested, though they are all hesitate when Africa, Middle East and South Africa are offering much lower, same quality crude oil. A Chinese trader said: “We are interested, but it is not cheap so we’ll wait and see.”. Meanwhile Japan can hardly raise their import quota for Iranian crude oil just because of the expensive price.
Iran crude oil will face big problems if sanctions & embargoes are not released. In all possibilities, sanction relief is not expected to occur until early 2016, according to Goldman Sachs analysts.


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