Page 21 - MEOG Week 13 2021

MEOG NEWS IN BRIEF MEOG

but then eased back as demand recovered. “The trend seems to be continuing, though that poses a challenge to the U.S. sanctions
At a meeting on March 4, OPEC+ buying appetite is waning because of high regime,” Eurasia Group analyst Henry Rome
surprised the market by deciding to hold inventories at ports and abundant supplies,” said.
output broadly steady, although Russia and said Emma Li, a senior Refinitiv analyst. “However, the structure of the sanctions
Kazakhstan were allowed slight increases. Separately, a trade source familiar with is not on the verge of collapse by any means
A source familiar with Russia’s thinking Iranian ship movements pegged China-bound especially because Iran is not able to repatriate
said on Monday Moscow would support cargoes at 30 million barrels for March, while much of that revenue.”
extending cuts again while seeking another Sara Vakhshouri, president of SVB Energy According to Refinitiv’s Li, about 650,000
small rise in production for itself. International, estimated Iran oil exports this bpd of Iranian oil were discharged in the
Benchmark Brent crude, which climbed month exceeded 1 million bpd. first 19 days of March, mainly via the eastern
above $71 a barrel shortly after the OPEC+ Reuters reported last month that China province of Shandong, the hub for China’s
decision, reaching its highest since the quietly accepted record amounts of Iranian oil independent refiners.
pandemic began, is now trading around $65. in early 2021, despite U.S. sanctions designed This compared with 490,000 bpd
Alongside concerns about the pandemic’s to penalise buyers. Analysts say the buying discharged in February and a record 797,000
impact on demand, a rise in Iranian oil was a key factor behind the slide in global bpd in January, she added.
exports is also prompting caution. Iran has Brent oil pries from $70 per barrel, limiting Chinese buyers are attracted to low
recently boosted shipments despite U.S. room for OPEC to increase production. prices for the crude which is being offered at
sanctions. “The recent jump in Iranian crude exports, discounts of $4-$6 a barrel to ICE Brent on
At a technical committee meeting notably to China, and crude going out of a delivered basis, traders said, adding that
on Tuesday, OPEC Secretary-General inventories are contributing to the weakness sellers were sometimes packaging the sale
Mohammad Barkindo “emphasized the need of the oil market, undermining OPEC+ efforts with import quotas.
to remain very cautious and attentive to to limit supply and setting prices for a third “The ultimate rule for private Chinese
changing market conditions,” OPEC said. weekly drop,” Rystad Energy analysts said buyers is cost and margin...and they find the
REUTERS ahead of the OPEC+ meeting on April 1. Iranian barrels offered at steep discounts hard
China, Iran’s top oil client, said last week to resist,” said a Beijing-based trader.
China’s Iran oil imports it will work to safeguard the Iran nuclear deal of the cargoes.
Reuters was unable to identify the buyers
and defend the legitimate interests of Sino-
seen hitting new high in Iranian relations. Iran in March for the second month in a row
Officially, China skipped imports from
Without commenting directly on the
March March oil transactions, China’s Foreign as no cargo has been marked for its Strategic
Ministry said late on Tuesday that Beijing
Petroleum Reserve (SPR), according to
China will receive another large influx of has “consistently opposed” the U.S. unilateral Refinitiv.
cheap Iranian oil in March passed off as crude sanctions and “long-arm jurisdictions” Tankers carrying Iranian oil typically
from other origins, curbing the top importer’s and urged Washington to lift these “illicit switch off their transponders when loading
appetite for crudes from other suppliers, sanctions” as soon as possible. to avoid detection, but then become traceable
according to traders and analysts. China’s commerce and energy ministries via satellites near ports in Oman, the UAE and
Close to 1 million barrels per day of had not responded to faxes and messages at Iraq. Some transfer part of their cargoes to
Iranian crude could arrive at China this time of publication. other ships near Singapore or Malaysia before
month, nearly half the volume that the world’s U.S. President Joe Biden has sought to sailing to China.
top exporter Saudi Arabia supplied to China revive talks with Iran on a nuclear deal China maintained small monthly
in the first two months this year. abandoned by former President Donald purchases of Iranian oil that averaged 2.4
Refinitiv Oil Research estimates this Trump in 2018, although harsh economic million barrels over the whole of 2020,
month’s arrivals at 3.75 million tonnes (27 measures remain in place that Tehran insists according to Chinese customs.
million barrels), topping the previous record be lifted before negotiations resume. REUTERS
in January of 3.37 million tonnes. “Iran is exporting more oil to China and

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