With the November 4 launch of U.S. sanctions against Iran drawing near, uncertainty about how much of global supply will be affected is running high. Mixed signals coming from some of Iran’s biggest oil clients are not helping, either, and chances are that this uncertainty will remain even after the sanctions snap back, until the first shipping data starts arriving.
Few things are certain and there is a lot of speculation. There is official information that the association of Japanese refiners has suspended its crude oil purchases from Iran and South Korean refiners have also stopped buying Iranian crude in the hope that Washington will grant the heavily import-dependent nation a sanction waiver.
Meanwhile, Bloomberg reported India’s largest refiners have not ordered any Iranian crude for November deliveries, suggesting India might follow suit with, but then clarifying that the deadline for purchasing oil cargoes for November delivery is still a couple of weeks away. Earlier this month, India said it could use rupees to settle its trade transactions with Iran and a government official said there has been no state decision to ask refiners to suspend Iranian oil purchases.
In Europe, the EU has come up with a mechanism to continue trading with Iran, notably in oil and oil products, but analysts are skeptical about how effective it will be. The mechanism basically means transactions will use the barter principle rather than money—a mechanism…