Following seizure of the oil tanker ‘Grace 1’ on 27 June in Gibraltar, within European territorial waters, an oil tanker run by oil major BP is being kept inside the Persian Gulf in fear it could be seized by Iran for retaliation. The ship was sailing toward Iraq’s Basrah oil terminal.
As OPEC and OPEC+ meet in Vienna, the outlook for the market is mixed, according to Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie energy consultancy. Geopolitical risk means the supply outlook is tightening, offsetting the moderate weakening in oil demand growth thus far this year, she said.
A wider conflict between the US and Iran would be negative for most types of ships and for the oil markets in general, as fewer ships will transit the Straits of Hormuz, said VesselsValue in its latest analysis, following tensions on the aftermath of the recent tanker attacks in the Gulf of Oman.
China dismissed a warning issued by the US Department of State not to provide services to the tanker ‘Pacific Bravo’ carrying Iranian crude oil, noting that energy deals between the international community and the Middle East nation should be respected.
The Significant Reduction Exemptions (SREs) granted last November to eight countries by the US for Iranian crude oil imports will not be renewed and are due to expire on 2 May 2019, the US State Department announced.
Hadi Haghshenas, Deputy of maritime affairs of Iran’s Ports and Maritime Organization, stated that Iran’s top priority concerning the maritime industry is to use low-sulphur fuel, which is required to be observed by all vessels for the following eight months.
OPEC crude production reduced by 240,000 b/d in February to 30.68 million b/d, which is the lowest level in 4 years. According to Gibson Shipbrokers, February numbers indicate a significant over compliance, with Saudi Arabia leading efforts to implement cuts with a 153% compliance rate, some 170,000 b/d already below their overall target.
Hadi Haghshenas, deputy director of maritime affairs in Iran, supported, during the closing ceremony of the 26th conference on coordination of marine organizations in Tehran, that they expect the government’s support in favour of using low-sulfur fuel in the country’s fleet over the next ten months.
Trump administration has moved forward, imposing new financial sanctions on Venezuelan state oil firm PDVSA, as part of a pressure campaign to make the government of Venezuelan president Nicolás Maduro step down. The new US measures aim to affect the pattern of petroleum shipping in the Caribbean and beyond, since the US has trade relations of oil and refined products with Venezuela.
South Korea did not import Iranian oil for the fourth consecutive month in December, after the reimposition of US sanctions. In fact, South Korea cut its 2018 imports from the major supplier by 60%. Currently, Saudi Arabia is the top oil supplier, as it delivered 43.60 million tonnes of crude in 2018.
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