Storing 40 million Barrels of oil at Sea in Anticipation of Nuclear Agreement
“The situation is favorable for us, because in Iran and Middle East, the cost is less than $10 (per barrel). That’s why we’re not worried about the market,” Zanganeh said. (Iran Daily, 16 June)
The global market is currently facing a supply glut. Ample supplies are expected to continue in near term, outweighing geopolitical concerns about the conflicts in the region. Prices are expected to be restrained despite seasonal demand increases as Saudi Arabia and other key producers maintain high oil output to maintain their market shares. Brent crude oil price was at $63 today.
Iran is storing as much as 40 million barrels of crude oil on supertankers at sea in preparation of a nuclear deal.
“The first thing (we) will try and do is to offload quite a lot of storage… we are going to sell this oil at any price,” said Mehdi Varzi, a former official at the state-run National Iranian Oil Company. “Floating storage is there to be put onto the market as soon as possible after some sort of agreement.” (Reuters/Trade Arabia, 16 June)
Shipping sources and tanker tracking data on Reuters showed over the past three months Iran had deployed at least 15 very large crude carriers (VLCCs), each capable of two million barrels, to store oil. The approximate 38 million barrels of Iranian crude in floating storage, in addition to shore-based stocks, could quickly add supply to the market. (Reuters, 16 June)
Under the current interim nuclear agreement, JPOA, Iran exports approximately 1 million barrels a day. Oil Minister Zanganeh has said Iran would pump another 500,000 within a month of lifting of sanctions and up to 1 million bpd within six months. Most analysts believe it will take more time for increases at those levels.
File photo: Iran’s main oil export terminal at Kharq Island (Getty Images)
9 comments:
So it have proved the smart strategies of previous ( including Ahmadinejad) and presen Islamic Republic's leadership, which had buought 12 supertankers from China, and denies logic of opponents, including those who make 'preffered' comments and support those who slander Islamic Republic at every opportunity.......with words 'akhoonds' for instance....
Would you restate your points re the topic of this post, I could not follow them. What does the use of the word "akhoond," which means Shia cleric, who by the way as a group run the Islamic Republic, has anything to do with Iran's storage of 40 million barrels of oil on VLCCs? What are you trying to tell us?
Nader
The anon above is trying to say in my own opinion that the strategy of storing it's oil super tankers has worked in the sense that immediately after the sanctions are lifted which is very likely, Iran can begin to sell them. While most commenters on this blog have criticized this policy though they have the right, it appears they are wrong and the policy has worked.
Anon 4:18 AM, Thanks so much for clarification of the anon's comments. But that's precisely where the confusion rested. Iran did not purchase the VLCCs to store crude on them, that's a non-economical way to build storage for crude oil. It bought the large tankers to ship crude oil to the Asian markets. For a different reason, the nuclear program, oil sanctions were imposed against Iran, resulting in VLCCs not being utilized as before, and sometimes they used them as storage platforms. Now that the sanctions could be lifted, Iran is using them to store cure to offload in the market as soon as JCPOA is signed. This latter use of VLCCs has nothing to do with their original purchase.
If one wants to defend the policies during Ahmadinejad, one needs to do so for the right reasons. Poor Ahmadinejad did not buy VLCCs to store crude oil!
Anon 4:18, I salute your capabilities to understand gibberish! I used google translator but didn't know what to put for the source language!
The 'akhoonds' don't steal and waste national revenues like the western lobbies controled by zionists, but they inspire those politicians who in adversiest conditions are long term visionaries, and with small mistakes design policies to exercise an optimal usage of resources.
Your article cities..."The first thing (we) will try and do is to offload....storage..... (and) sell this oil at any price", and it points to a strategy that Iran will get significant influx of money which will have profound impact to give an accelerated speed to Iran's economy.
It will also punish those who conspired to increase their outputs to deprive the Islamic Republic of revenues.
Foreign experts earlier frequently underlined that Iran chooses to invest its money in projects which will bring fruits in a strategic way.
They pointed that Iranian military budget have assigned money to those areas like missiles, electronics, drones, submarines and so on. which will enhance defences in short and very optimal way in comparison to other countries with a similar budgets.
It is worth to mention that under Ahmedinejad's tenure, Iran managed to withdraw many financial assets from the West in anticipation of coming sanctions...
Some blame him for mistakes, but only those who do nothing, don't make mistakes.........
Investing money in ships enabled to storage oil on them, and it will be Iran who can flood world at once with its oil at any price, and others oil producers may have to ask Iran for designing outputs to bring oil prices to the previous levels.
By buying those tankers, at the time of $100 oil price it was cheaper, than if they would wait until sanctions are lifted, and they would have to use revenues from sale of oil at lower prices to buy the same supertankers.....
"The 'akhoonds' don't steal and waste national revenues like the western lobbies controlled by zionists," what does this mean? They steal less than the West and the Zionists? Is that what you are trying to tell us?
And please give us the most successful examples of investments made since Ahmadinejad came to power that brought fruit, as you say. I am really curious to know, because those example would negate the notion that the man wasted $100 billion dollar in oil money, when oil prices were at their historic highs. Please stay first with investments normally associated with a country's economic growth. Thanks in advance.
Author at 8:15 AM
Ahmadinejad had started his education before revolutionary times
He and his wife have PH.D degrees and their children also graduated from Iranian universities.....
Ahmadinejad established the Iranian tunnel association, and during his times dozens of miles of tunnels, including for subways and military purposes, were bored.
It was time where numerous major roads, bridges and dams were built too.
During his era Iranian space program has been commenced and military projects blossomed with new missiles, hidden silos and submarines....
Finally, it was under his tenure that the nuclear energy development had accelerated to the highest levels.
His other policies also contributed to that, that the oil price remained at high levels....despite sanctions.
Many poor families were helped with his housing construction programs and loans, as never before........
And so on.....( maybe others will develop or add more info to my general information ).
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