Reduced Iran oil supplies badly hurt Asian refiners

Young journalists club

News ID: 40396
Iran » Iran
Publish Date: 14:30 - 05 June 2019
TEHRAN, Jun 5 - Asian oil refiners are seeing their profits shrink from the loss of Iranian crude supplies after the US decided in April not to extend sanctions waivers for imports from Iran.

Reduced Iran oil supplies badly hurt Asian refinersTEHRAN, Young Journalists Club (YJC) - According to media reports, refinery margins have dropped to the lowest for this time of year in 16 years and are expected to deteriorate further.

The decline in profits comes amid reports that Saudi Arabia and other producers in the Middle East have raised their crude oil prices to Asian and European customers and cut them to the United States.

On Sunday, state oil monopoly Saudi Aramco said it had raised its July price for its Light grade for Asian customers for the second month in a row.

The company set the July Arab Light versus June to a premium of $2.70 per barrel to the Oman/Dubai average, up $0.60 a barrel. The Arab Light OSP to the United States, however, was set at a premium of $2.75 a barrel to the Argus Sour Crude Index (ASCI) for July, down 30 cents a barrel from the previous month.

The United States has pledged to eliminate all Iranian crude oil exports, and is relying on Saudi Arabia and its other allies in the Persian Gulf to fill the gap in supplies.

While analysts have doubted the US ability to reduce Iran’s crude exports close to zero, Saudi Arabia would have to raise its production to unprecedented levels to cover the loss of more than 2 million barrels per day (bpd) of Iranian supplies.

Markets experts say a theoretical elimination of Iranian crude oil would leave the global market tighter than at any time since the oil shocks of 1973/74 and 1979/80, with resulting upward pressure on prices.

The US decided not to extend its sanctions waivers to eight importers of Iranian crude after the exemptions expired at the beginning of May, but Iran is operating in the shadows of the global oil market.

Last week, Hong Kong said it has been warned by the United States to be on alert for a vessel allegedly carrying Iranian petroleum that may seek to stop in the Asia financial hub.

Reports said the fully laden Pacific Bravo was owned by China’s Bank of Kunlun which has been the main official channel for money flows between China and Iran since 2012.

The Chinese lender, however, denied owning the ship, Bloomberg reported on Monday. “After our checks, the vessel Pacific Bravo, and the goods it carries, have nothing to do with Bank of Kunlun,” the bank was quoted as saying.

The financial arm of state energy giant China National Petroleum Corp (CNPC) also denied links to the vessel.

China is the top buyer of Iranian oil and nearly all its oil payments go through Kunlun.

Hong Kong which is a special administrative region of China, however, dismissed the US warning, saying it does not implement unilateral sanctions.

“Certain countries may impose unilateral sanctions against certain places on the basis of their own considerations," a spokesperson for Hong Kong’s Commerce and Economic Development Bureau said.

"Those sanctions are outside the scope of the UN Security Council sanctions” implemented by Hong Kong, the spokesperson said.

Beijing also dismissed Washington’s warning to Hong Kong, saying “normal energy dealings” with Iran are reasonable, lawful and should be respected.

“China has all along opposed unilateral sanctions and so-called long arm jurisdiction,” a Ministry of Foreign Affairs spokesman said.

Source: Presstv

iran ، asia ، oil
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