Page 36 - IRANRptSep18

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
India will “definitely” not entirely cut off its crude oil imports from Iran, but it expects to have more clarity on its oil purchasing strategy amid the US sanctions on Tehran after a meeting with top American officials next week, a senior Indian government official with direct knowledge of the country’s oil purchasing policy told Reuters on August 29.
“Definitely we are not going to zero,” the Indian official was cited as saying, noting that a September 6 meeting between US Secretary of State Mike Pompeo and Defence Secretary Jim Mattis with India’s Foreign Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman was set to shed more light on purchases of Iranian oil by India, the second largest buyer of crude from Iran.
Under a second wave of heavy sanctions set to hit Tehran on November 5, the US intends to close off as much of the world oil export market to Iran as possible. The biggest buyer of Iranian oil, China, has informed the Trump administration it has no intention of respecting the sanctions as they are not UN-blessed. Previous reports, however, have indicated India is set to bargain for a waiver that would allow it to reduce its imports of Iranian oil by around half.
Iran has been offering big oil price discounts, cargo insurance and tankers operated by Iranian companies to encourage buyers to keep purchasing Iranian oil. The insurance and tankers help to reduce exposure to US secondary sanctions.
Between August 1 and 16, total Iranian oil and condensate exports sank by an average 600,000 bpd compared to July loadings, largely due to greatly reduced flows to India, Platts cFlow preliminary tanker tracking data shows. The exports amounted to 1.68mn bpd in contrast to the July average of 2.32mn bpd.
Iraq is waiting in the wings, ready to increase its crude oil exports in anticipation of slipping Iranian oil exports, and only awaits the go-ahead from OPEC, acting director-general of Iraq’s state-run Oil Marketing Co., Alaa al-Yasiri, said in an interview with Reuters on August 29.
OPEC’s Joint Ministerial Monitoring Committee is expected to discuss an increase in oil production during the next meeting, expected to take place on September 11.
On August 28, Reuters reported a long-time advisor at Saudi Arabia’s energy ministry as saying the US sanctions aimed at Iran were unlikely to stop Iranian oil exports completely.
Speaking at an oil conference in the Norwegian city of Stavanger, Ibrahim al-Muhanna reportedly added that Iran would be unable to close the Strait of Hormuz and Bab al-Mandab sea routes even partially—something it has indicated it might attempt to do to ensure that nobody in the Persian Gulf can make sufficient energy exports if the US measures prevent the Iranians from doing so.
“Current sanctions are unlikely to stop Iranian oil exports completely, as almost all experts agree. I mean, they will continue to export one million [bpd] or so. So closing that Strait of Hormuz will damage the Iranians as much as
36 IRAN Country Report September 2018 www.intellinews.com