In an attempt to increase pressure on Iran in order to push through a nuclear deal with Iran, the U.S. is considering cracking down on Iranian oil exports to China.
Chart of the Week
- The government of the United States is mulling a ban on Chinese imports of Iranian crude as it becomes increasingly clear that reaching a deal with Iran before the inauguration of its new government is unlikely.
- The oil markets see the U.S. somewhat unlikely to antagonize China further, yet Washington would be inclined to highlight that it has other options to opt for should the talks fail altogether.
- Verifiable Chinese imports of Iranian crude amounted to some 250kbpd over the course of H1-2021 according to vessel-tracking firm Kpler, a 130% increase year-on-year, largely coming on the back of Biden-era softening of rhetoric towards China.
- A significant volume of Iranian exports, however, is routinely trans-shipped in the region of the Malacca Straits, rendering the deciphering of their final destination all but impossible.
Market Movers
- Brazil is expected to double its oil production between now and 2030, promoting its image as a safe-haven investment for oil and gas projects amidst shrinking international opportunities, buoying market sentiment for Petrobras (NYSE:PBR).
- The Italian oil major Eni (NYSE:E) has signed an agreement with Azora Capital to buy 1.2GW of solar and wind capacity in Spain, boosting its renewables footprint in the Mediterranean. 230MW worth of solar assets are already in operation, the rest comes from solar projects already being developed.
- ExxonMobil (NYSE:XOM) shut down its 120kbpd Slagen Refinery in Norway last month, becoming the fifth European refinery to see its operations halted for good because of pandemics-triggered ramifications.
Tuesday, July 27, 2021
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Greenpeace Seeks to Derail Latest North Sea Project. Greenpeace is seeking to take the UK government in court over the forthcoming 150 MMbbls Cambo project, as Britain prepares to host the COP26 Glasgow conference in November. Cambo, backed by Shell (NYSE: RDS.A) and located in harsh seas amidst complex geology, wields heavy oil of some 23-25° API and is expected to come onstream by 2025 - the government approval is expected to take place within several weeks.
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By Josh Owens for Oilprice.com
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Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and… More
Comments
China has never stopped buying Iranian crude since US sanctions against Iran were reintroduced so it isn’t going to stop now. Moreover, China has a 25-year strategic agreement with Iran under which it will invest an estimated of $600 bn in Iran’s infrastructure and its oil and gas industry. In return, China will get guaranteed supply of Iranian crude at a discounted rate for the duration of the deal. Furthermore, Iran is an important element in China’s Belt and Road Initiative (BRI). It is estimated that China has been importing up to 1.0 million barrels a day (mbd) of Iranian crude.
Without the United States agreeing first to lift the sanctions, Iran won’t even negotiate with the Biden administration. On the other hand, the United States won’t lift the sanctions without Iran accepting limitations on its nuclear and ballistic missile development programmes which Iran will never do and therein lies the problem.
In my opinion, a lifting of US sanctions against Iran won’t see the light of day even by 2023 or ever. The reason is that the positions of the United States and Iran are irreconcilable.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Iran has proven again and again that is genuinely not after Nukes yet we are pushing them toward that direction. Its time to stop listening to the so called allies in Tel Aviv and Riyadh and go after our own interest. US needs Iran to contain Russia and China and is the biggest prize in Middle East. Whomever aligns its interest with Iran will be the next sole Super power and it appears China is almost there.
Iran has proven again and again that is genuinely not after Nukes yet we are pushing them toward that direction. Its time to stop listening to the so called allies in Tel Aviv and Riyadh and go after our own interest. US needs Iran to contain Russia and China and is the biggest prize in Middle East. Whomever aligns its interest with Iran will be the next sole Super power and it appears China is almost there.