Tankers: Could Iran Oil Be Sanction-Free in the Near Term?

The tanker market could be set for a significant boost, should Iran’s oil exports return to the global market. In its latest weekly report, shipbroker Intermodal said that “pitching up from Spring, oil prices have been under considerable pressure due to sluggish market fundamentals, or at least the perception of such, individual nations, headed by Saudi Arabia and Russia, have significantly increased their efforts over the past two months with OPEC+ having announced cuts. Zooming in, weekly price fluctuations illustrate the current state of the oil complex, as refined products continue to outplay crudes with some flair. While WTI ended -$1.42/barrel and Brent ended the week -$0.32/barrel, heating Oil was 14.78c/gallon higher, blendstock was 5.32c/gallon higher, and Gasoil gained $26.25/ton. As much as the market acknowledges a derivative-driven rally, which appears from the most recent commitment of trader’s report, crudes are still somewhat reticent”.

According to Intermodal’s, Alex Christakoudis, Tanker Operations, “nothing about this is particularly worrisome for products still plagued by refinery issues. The news of a fire at Garyville’s facility contributed significantly to Friday’s rally and the recent increase in sentiment. Although the fire has been extinguished and was likely the cause of this morning’s decline in product prices, such incidents will continue to be catalysts for price increases as the oil industry is currently extremely sensitive to disruptions at any refinery, anywhere in the world. Literally and figuratively, bears will be swept away if one of these poetically named ‘spinners’ makes landfall in a product-sensitive area”.

“Quite peculiar, worth mentioning, the erst ‘dark side’ of Iranian nuances, which despite depicting US to continue stringently in an enforcement of a robust framework of oil and other sanctions against Iran, figures shows that story merely may change as two-parts have made cautious diplomatic motions, but a return to their lapsed nuclear agreement remains remote”, Christakoudis added.

“However, a global energy market agreement is already in effect as prisoner exchanges, the unblocking of restricted assets, and possibly even Iran’s uranium enrichment have advanced because of covert diplomacy between the two countries which appeared to have also reached an informal agreement in respect to the energy flows.US officials concede in private that they have gradually loosened sanctions on Iranian oil sales. Since the moratorium went into effect five years ago, Tehran’s crude exports to China have increased to their highest level in a decade, and production has been restored to its highest level. Officials in Iran are confident that they will shortly increase production as this supply flood is helping to moderate oil prices, which have been dropped lately, providing respite to consumers and central banks after years of inflation”, Intermodal’s analyst concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide