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Tue 16 Oct 2018, 08:24 GMT

New opportunities emerge for producers as Iranian sanctions draw closer


By A/S Global Risk Management.


Michael Poulson, Senior Oil Risk Manager at Global Risk Management.
Image credit: A/S Global Risk Management
As U.S. sanctions on Iran are closing in, new opportunities for other producers arise.

As Iranian crude production and exports have been decreasing, other OPEC producers are trying to gain market share from what Iran is losing.

Earlier this year, Iraqi officials stated that they would like Iraq to increase their export capacity from the south and increase production of crude oil. Latest news is that they plan to export 4 mbpd up from an average of about 3.6 mbpd, and with Iran fading out of the picture a new opportunity is rising.

Saudi Arabia, another huge oil producer, seems to concentrate especially on India as India seems more likely to cut imports from Iran than China. Yesterday, Saudi energy minister Khalid al-Falih stated that they were committed to meeting India's rising oil demand. The statement likely comes as there is uncertainty about whether the U.S. is going to distribute waivers on countries which continue importing Iranian oil after the U.S. sanctions take effect from early next month. Even if waivers are granted, they will not be permanent.

On the financial data front, Chinese CPI (Consumer Price Index) and PPI (Producer Price Index) came in almost completely in line with expectations.

Tonight the American Petroleum Institute (API) will release its inventory statistics.

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