The oil market is about to face a difficult few months, after the US imposed secondary sanctions on Iranian exports. This led Brent to over US$80 a barrel in October. However, currently there is enough supply to meet demand this winter, but the margin for error is little, Woodmac said.
Iran’s crude oil exports and production have declined since the May 2018 announcement by the United States that it would withdraw from the Joint Comprehensive Plan of Action and reinstate sanctions against Iran, according to EIA. In September, Iran’s crude oil and condensate exports fell to 1.9 million b/d.
EIA forecasts Brent crude oil spot prices, which averaged $79 per barrel in September, to average $81/b in Q4 2018, before falling to an average of $75/b in 2019. However, the effects of US withdrawal from JCPOA, re-imposition of sanctions on Iran, and potential response from OPEC pose uncertainty.
A large amount of Iranian crude oil will arrive at China’s Dalian port during October and the beginning of November, right before US sanctions on Iran apply. Namely, the National Iranian Tanker Company will ship more than 20 million barrels of oil to Dalian.
According to JPMorgan, oil prices could increase this winter, due to the US sanctions on Iran. Namely, JPMorgan expects the price of a barrel of oil to increase from $60 to $85 a barrel in the next six months, while a ‘pike’ to $90 is also on the table. These sanctions will become effective on November 4.
OPEC received about $567 billion in net oil export revenues in 2017, an increase of 29% from revenues in 2016. Increases in both crude oil prices and in net OPEC oil exports increased revenues in 2017, and EIA expects that revenues will continue to increase in 2018, according to EIA’s August Short-Term Energy Outlook.
More actions needed to control slips, trips and falls onboard05/08/2020
- Women in shipping
Career Paths: Karine Langlois, IMO05/08/2020
Career Paths: Marco Cristoforo Camporeale, Inmarsat05/08/2020
Containership disabled due to engine room fire05/08/2020
Cruise industry proceeds with seafarers repatriation, but challenges remain05/08/2020
Shipping’s climate impact up by 10% in six years, says IMO study05/08/2020
At least 78 dead after explosion in Beirut port05/08/2020
- Maritime Health
Update 05 August: Live map depicts spread of coronavirus05/08/2020
Armed guard takes control of M/V Jaeger04/08/2020
Optimized routing to reduce GHG, Panama Canal says04/08/2020