EMEA News
Iran Reportedly Trading With China's Teapots; Also Will Announce Companies Eligible To Develop Its Oil Fields
Iran's push to fortify its post-sanctions international market presence took two more steps forward this week with an announcement it will soon name companies eligible to submit tenders to develop its oil and gas fields; and a report that it is broadening its export trade by supplying China's independent (teapot) refineries.
The news coincides with Mohammad Ali Khatibi, Iran's former governor for the Organization of the Petroleum Exporting Countries, telling Tehran Times that there's still room for the Islamic Republic to increase oil exports, unlike its rival, Saudi Arabia.
Ali Kardor, managing director of the National Iranian Oil Company (NIOC), told the Iranian oil ministry's news agency SHANA that a preliminary list of international energy companies eligible to take part in tenders to develop its oil and gas fields will be issued within the next two weeks; but only companies registered as exploration and production or international oil companies as well as rated by Standard & Poor's, Moody's, or Fitch credit rating agencies will qualify.
He said, "After creating the first list of international companies, a limited tender will be held."
Meanwhile, 2 million barrels of Iranian crude loaded by trading house Trafigura onto supertanker Olympic Target is scheduled to arrive this week in Shandong, where most of China's independent refineries are located.
Sources told Reuters the sale was agreed on condition Trafigura will market the crude to Chinese teapots, which last year were granted import licenses in order to boost competition in the state-dominated sector.
While many analysts have worried that Iran's bullish behaviour threatens a market that is still at the mercy of overproduction and inventory issues, Ali Khatibi told Tehran Times that "Iran's oil helped stabilize the global oil market" when the Canadian wildfires and Nigeria's political tensions caused those countries to cut their exports earlier this year.
He added, in reference to the Islamic republic's current output having nearly doubled to about 2 million barrels per day (bpd): "It is worth mentioning that before the sanctions, exports of Iran's crude oil was hovering around 2.5 million bpd, i.e., there is room for the Islamic Republic to further increase exports thanks to the demand from its customers."
By contrast, he thinks OPEC's biggest producer, Saudi Arabia, "would only add around 1 million bpd to its current production level, which would not be considered sustainable regarding the capacity of their tanks.
"Any decision to further increase oil production level will incur damage to Saudi Arabia's facilities and will indeed reduce its production level in the long run."
But as impressive as Iran's comeback is, analysts unimpressed by rhetoric wonder if it can advance much further in the near-term.
Last month, Antoine Halff, a senior fellow at the Center on Global Energy Policy at Columbia University, told Bloomberg that, "to exceed presanctions levels would require investment and technology, and that's a much longer-term proposition."
