EU seeks Indian help pressuring Iran; IEA sees ample supply

By OGJ editors

The European Union has formally appealed to India, an important buyer of Iranian crude oil, for help in resisting the Islamic Republic’s nuclear program as early adjustments reported by the International Energy Agency indicate the market will remain amply supplied despite toughened sanctions.

At the 12th India-EU Summit Feb. 10 in New Delhi, European Council Pres. Herman Van Rompuy and European Commission Pres. Jose Manuel Durao Barroso urged Indian Prime Minister Manmohan Singh for help in pressuring Iran to resume negotiations over its nuclear development program, target of EU sanctions imposed on Jan. 23 (OGJ Online, Jan. 26, 2011).

In a statement after the meeting, Van Rompuy said he had asked Singh “to use India’s leverage towards Iran to help bring Tehran back to the negotiating table.”

India imported about 350,000 b/d of Iranian crude oil last year, according to IEA. It recently increased its purchases from Saudi Arabia and reached an agreement with Iran to pay for 45% of its oil purchases in rupees.

Although the EU embargo directly affects imports only by member countries, totaling as much as 600,000 b/d, EU and US sanctions on Iran’s central bank will hamper payments by other Iranian customers. IEA said the sanctions might cut Iranian exports, recently 2.6 million b/d, overall by as much as 1 million b/d. Outside the EU and India, Iran’s biggest oil customers are China, South Korea, and Japan.

Japan last month told the US it would cut its purchases of Iranian oil (OGJ Online, Jan. 13, 2012). And on Feb. 9, South Korea’s S-Oil announced signing of an unusual 20-year crude-supply deal with Saudi Aramco, a major shareholder, ensuring feedstock supply for its 669,000 b/d refinery at Onsan (OGJ Online, Feb. 9, 2012).

Saudi production will be crucial to market effects of the sanctions against Iranian oil.

In a move seen as assurance that it will compensate for diminished Iranian exports, Saudi Aramco lowered prices for March crude oil purchases by Asian customers. IEA, in its February Oil Market Report, cited recent assurances by Saudi Arabian Minister of Petroleum and Mineral Resources Ali Al-Naimi that the kingdom can increase oil production by nearly 2 million b/d in a matter of days to 11.8 million b/d.

IEA said Angola, the UAE, Libya, and Iraq are expected to bring new production capacity online during 2012 totaling 850,000 b/d. Supply from producers not belonging to the Organization of Petroleum Exporting Countries is expected to increase nearly 1 million b/d this year, it said.

The EU sanctions don’t take effect for existing Iranian oil exports until July 1, but buyers are finding other suppliers.

IEA said China, Iran’s largest oil customer and an open critic of the sanctions, is believed to be lifting about half the 550,000 b/d it had been buying from the Islamic Republic, partly because of a price dispute. The country has increased purchases from Saudi Arabia, possibly to fill new strategic storage facilities. China also has increased oil purchases from Angola and Russia.

Japan and South Korea are importing record amounts of crude from West Africa, IEA said.

“While there appears to be ample crude currently available in the market,” the agency said, “the stricter sanctions are nonetheless muddying the waters for the tanker industry.” Insurance rates have risen for tankers calling at Iranian ports or steaming within 12 miles of the Iranian coast.

Related Articles

Statoil reduces capital budget by $2 billion following 4Q losses

02/06/2015 Statoil ASA has reduced its organic capital expenditure to $18 billion in 2015 from $20 billion in 2014. The move comes on the heels of a fourth qu...

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...

Union strike ongoing at US refineries as negotiations continue

02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue...

NCOC lets $1.8-billion pipeline contract for Kashagan field

02/06/2015 North Caspian Operating Co. (NCOC) has let a $1.8-billion engineering and construction contract to ERSAI Caspian Contractor LLC, a subsidiary of Sa...

AOPL releases 2015 safety performance and strategic planning report

02/06/2015 The Association of Oil Pipe Lines is committed to further improvements despite a 99.99% safe petroleum liquids delivery rate, AOPL Pres. and Chief ...

MARKET WATCH: NYMEX oil price bounces back up somewhat

02/06/2015 Crude oil prices on the New York market bounced up $2/bbl to settle slightly above $50/bbl Feb. 5. The positive momentum continued during early Jan...

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected