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First Iranian Crude Floating Storage Vessel Departs Region, Exports to Increase After Sanctions Lifted

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Following the lifting of sanctions on Iran’s oil transactions, there are possible changes ahead. The Iranian VLCC tanker, Serena (IMO 9569645), was recently cast off from the port of Assaluyeh after being moored there for more than a year, and is expected to arrive in Uslan, South Korea, on February 11, 2016, according to Genscape. This tanker is among hundreds of vessels which were removed from a sanctions list in recent days.

On January 16, 2016, Europe and the United States lifted all economic and financial sanctions related to Iran’s nuclear program in accordance with the nuclear agreement reached in July 2015. The lifting of sanctions on the so-called implementation day removed many of the bans that had been limiting Iran’s activity related to the import, purchase, swap, and transportation of oil, gas, and petroleum products, some of the main sources of income for its economy.

Total Iranian exports to Mediterranean So far in January 2016, 29mn bbls of crude was monitored by Genscape as leaving Iran, which is now projected to see total monthly exports of around 33-37mn bbls during the month. After a slowdown in November 2015, partly due to South Korea taking no Iranian barrels, exports rose in December 2015 to 34mn bbl.

Over the past year, Iranian exports have averaged about 30-32mn bbls per month, or around 1.1mn bpd. That crude has principally headed to East Asia, which has been taking about 20mn bbls per month, and the Mediterranean, which has taken about 5-7mn bbls per month mainly into Turkey and Syria, according to Genscape ship monitoring. India has swung between taking 3-8mn bbls per month from Iran.

Iranian officials have announced plans to ramp up production by 500,000 bpd (15mn bbls per month), aiming to target fast-growing Asian markets, in particular India, as well as its old partners in Europe. A gradual growth on Iran’s export levels is expected in coming months, while the existing global oil glut is likely to prove a major obstacle for the country’s crude being absorbed in the market without further price decline.

Iranian exports by destination region

Iran has also said it could increase capacity by another 500,000 bpd within five or six months. It is likely that it will take some time to secure buyers for that extra capacity in the current over-supplied environment.

Vesseltracker

Below is a chart showing a possible scenario where the initial 500,000 bpd increase takes six months to fulfill.
Iranian historical exports with growth scenario for ramp-up of 15mn bbl per month

Genscape monitors Middle East Crude exports daily using its Genscape Vesseltracker data together with market intelligence sources to identify the loadport of each departing crude tanker and track it through to its final destination. The weekly Middle East Crude Report published Wednesdays includes complete details on every departing shipment and will continue to track the growth in Iranian output as it happens to help market participants assess the impact of any changes in flow on regional markets.

Genscape and Vesseltracker have combined their extensive proprietary energy monitoring networks to launch the world’s most comprehensive and accurate picture of global shipping. To learn more about Genscape Vesseltracker, or request a free trial, please click here.

Using Genscape Vesseltracker data, the Middle East Waterborne Crude Report illuminates the flows coming out of the Middle East producing countries so that traders and analysts can better gauge markets in Asia, Europe, and the Americas. It provides traders and analysts with insight and analysis to better forecast short-term price shifts by enabling them to anticipate the arrival of crudes from the Middle East. This weekly report offers new transparency and helps market participants inform market positions, improve decision making, and gain insight on key market drivers. To learn more about the Middle East Waterborne Crude report, or to request a free trial, please click here.

Additionally, the North American Waterborne Crude Report and European Waterborne Products Report also use Genscape Vesseltracker data to provide weekly insight into the global refined products markets. The North American Waterborne Crude report provides an overview of U.S. Jones Act vessel and waterborne crude import volumes moving in the West, East, and Gulf Coasts with market analysis and freight cost assessments. To learn more about the North American Waterborne Crude Report, please click here. Genscape’s European Waterborne Products Report illuminates the flows in and out of Europe and the Baltic so that traders and analysts can better gauge global refined products markets. To learn more or request a free trial or the European Waterborne Products Report, please click here.

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