EMEA News
Market One Step Closer to Further Price Drops With Iran Just "Days Away" From Having Sanctions Lifted
Some of the lowest bunker prices seen in over a decade could soon be heading even lower, with Iran potentially just days away from having its sanctions suspended by the US and other western nations.
U.S. secretary of state John Kerry last Thursday said that Iran is now very close to complying with last summer's nuclear deal, and that "we are days away from implementation, if all goes well."
Kerry told reporters that Mohammad Javad Zarif, foreign minister for Iran, assured him that the nuclear obligations would be satisfied as soon as possible, and that the Obama administration is "prepared to move on that day" to remove oil, banking, and commerce sanctions.
Iran is understood to be mobilizing to achieve its immediate goal of adding 500,000 barrels per day (bpd) to an already grossly bloated market – a move which the International Monetary Fund (IMF) last month warned could sink oil prices by a further $5 to $15 per barrel.
Brent crude Friday closed at $33.55/bbl, and while few analysts currently appear to consider sub $20 oil a possibility, Ship & Bunker reported last week that there are growing signs that the market is bracing itself for crude in the low $20's.
Last November, Iran's oil production increased for the sixth consecutive month to 3.31 million barrels per day, and the country's largest oil terminal, Kharg Terminal, is said to be being prepped to accommodate additional VLCCs.
Meanwhile, major carriers such as Mediterranean Shipping Company, CMA CGM, United Arab Shipping Co, and China Shipping Container Line are reported to have begun to bring their fleets to Bandar Abbas on their Far East – Middle East service, and another shipping giant, Maersk, is reportedly interested in developing Iran's oil prospects in the Caspian Sea.
Also, talks are said to be well underway for the National Iranian Oil Company (NIOC) to sell Iran's gas condensate to undisclosed customers, possibly in China, United Arab Emirates, South Korea, and/or Japan.
Falling fuel prices might not be good news for everyone, with Drewry last week noting ocean freight rates on major East-West trade routes experienced another fall in 2015's last quarter, due to falling bunker prices, overcapacity, and "intense competition" between carriers.
