• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 6 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 9 minutes Why is Strait of Hormuz the World's Most Important Oil Artery
  • 13 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 33 mins Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 33 mins Wonders of Shale- Gas,bringing investments and jobs to the US
  • 3 hours Rural and Conservative: Polish Towns Go 'LGBT free' Ahead Of Bitter European Election Campaign
  • 50 mins IMO2020 To scrub or not to scrub
  • 3 hours Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? To get Jared (Frisch School 2.8 GPA) a Mideast win with peace deal ? China greatest threat next 50 years.
  • 8 hours Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 2 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 1 hour Crude oil?
  • 4 hours Greenpeace Blocks BP HQ
  • 2 hours Shale to be profitable in 2019!!!
  • 10 hours DUG Rockies: Plenty Of Promise, Despite The Politics
  • 34 mins California's Oil Industry Collapses Despite Shale Boom
  • 14 hours Get First Access To The Oilprice App!
  • 2 hours China Downplays Chances For Trade Talks While U.S. Plays ‘Little Tricks’
Oil Markets Must Prepare For Maximum Fear

Oil Markets Must Prepare For Maximum Fear

Oil prices this week are…

The Single Most Bullish Indicator For Oil

The Single Most Bullish Indicator For Oil

Crude futures saw some headwinds…

South Korea Become First Major Asian Customer to Halt Iranian Imports

The EU embargo on Iranian oil is due to take effect on the 1st of July, but just before that date Ramin Mehmanparast, a spokesman for the Iranian Foreign Ministry, has issued a threat saying that if the embargo is allowed to work, it will have a “negative impact” on Tehrans’s negotiations over its nuclear program.

Last week in Moscow Iran met with six world powers to discuss its nuclear program, and yet again no progress was made in resolving the conflict. A “negative impact” would only make things even harder, drag the affair out for longer, and potentially have a larger effect on global oil prices.

Due to pressure from the US and EU on countries that import Iranian crude, the International Energy Agency says Iran is exporting only 1.5 million barrels a day, 40% less than six months ago.

One of the most profound effects of the EU embargo is the loss of insurance coverage for tankers carrying Iranian crude oil. Most tankers in the world are covered by Western protection and indemnity clubs, with the majority of brokers based in London. The loss of this coverage means that few countries are willing to import Iranian crude.

South Korea has just become the first of Iran’s major Asian customers to stop all oil purchases. In a joint statement by the economy, finance, and foreign affairs ministries, they announced it would halt all imports from the 1st of July due to the loss of insurance for tankers.

If more countries follow suit the embargo could have sufficient impact in order to force Iran back to the negotiating table with a bit more willingness to strike a deal. Well that’s that the West are hoping.

By. Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage

Leave a comment
  • Philip Andrews on June 27 2012 said:
    "Japan will Provide Insurance to Iranian Tankers when EU Sanctions Take Effect"

    This could start a trend amongst Asian countries heavily dependant on Iranian oil. It is difficult to see how Iranian oil could be adequatelyy substituted for in the medium to long term.

    Embargoing it will leave too big a hole in the oil supply chain. Saudi can compensate for a while but there are limits. If Iranians can find ways to get around Western insurance 'sanctions', that would create an interesting situation for the sanctions regime.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News