Page 7 - AsianOil Week 42 2021
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the last couple of years. The research firm said benchmark climbed above $86 per barrel for the
Petronas’ FIDs dropped by 70% year on year in first time in three years on October 21 amid by
2020 and would likely contract by 85% again this tight supply and robust demand.
year from 2019 levels. “The reality is there is a lot of supply
Rystad noted that in addition to four key [capacity especially among the OPEC+
projects in Malaysia and Indonesia this year, the countries]. The reason why [oil] prices are
state major was likely to sanction only a handful high is because OPEC is able to control sup-
of projects in October-December. This figure, ply and will slowly release more over time.
however, is anticipated to pick up over the next At a certain price, we think there will be
couple of years, with Petronas forecast to sign off even more supply [especially coming from
on 10-15 projects. the North American shale oil producers],”
Zulkifli, meanwhile, was cautious about the Bernama quoted the executive as saying.
longevity of high oil prices, noting that while the He added: “We don’t think oil prices will
global post-coronavirus (COVID-19) economic reach beyond $100 per barrel. We believe prices
recovery was driving demand, prices would will be between $50 and $60 per barrel moving
eventually retreat as supply caught up. The Brent forward.”
EAST ASIA
China’s teapots eye Iranian crude
PIPELINES & CHINA’S independent refiners, known as tea- officials are relying on diplomacy rather than
TRANSPORT pots, reportedly have their eye on millions of sanctions enforcement to address such sales and
barrels of crude floating off China and around that such shipments are therefore on the rise.
Singapore and Malaysia that include Iranian oil. The Chinese independent oil processors usu-
The teapots are set for a crude buying frenzy ally attempt seek to use up their import quotas
as they seek to use import quotas before they with quick oil deliveries so they can apply for
expire in less than three months, Bloomberg comparable volumes in the next year.
reported on October 20. The situation could Teapots will have to pay up if they want Rus-
increase calls in the US for the Biden adminis- sian ESPO oil from the Far East—which typically
tration to put more pressure on Beijing to curb takes less than a week to be shipped—after spot
its buying of oil from Iran. Sanctions inherited differentials for the grade surged, Bloomberg
from the predecessor Trump administration still noted. That’s likely to prompt processors to con-
officially commit the US to make efforts to drive sider other grades from the Middle East, or even
down Iranian oil exports to zero. sanctioned crude from Iran stored in tankers
Ever since the sanctions were brought in, offshore Asia, said traders quoted by the news
Iranian oil sales to China on the grey market agency.
have remained substantial, but there is a feeling Teapots account for about a quarter of China’s
among critics of US President Joe Biden that his overall oil-processing capacity.
Week 42 21•October•2021 www. NEWSBASE .com P7
