Iran offers to ship crude to India for free to boost sales

Vikrant

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Apr 20, 2013
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NEW DELHI: Iran is offering free delivery of crude to major client India, industry sources said, signalling that tough Western sanctions which have slashed its exports in half are driving Tehran to increasingly desperate measures to keep oil flowing.

The United States has yet to ease the pressure on Asian buyers to continue reducing purchases from the OPEC member, even though Iran and world powers began two days of talks on Thursday hoping to reach a "first step" towards ending the decade-old standoff over Tehran's disputed nuclear programme.

The drop in exports is costing Iran billions of dollars in lost revenue every month. Tehran is also unable to repatriate most of the money earned from oil it does manage to sell, as the sanctions have cut off bank transfer facilities, crippling its economy by choking off its biggest revenue stream.

Despite the near halt of petrodollar payments, Iran is resorting to measures such as offering deep discounts on oil and now free delivery to India, according to sources who requested anonymity because of the sensitivity of the issue.

Iran's remaining Indian clients - Mangalore RefineryBSE 3.95 % and Petrochemicals Ltd, Essar OilBSE 0.27 % and Indian Oil Corp - could save freight of 70 cents to $1 a barrel on purchases from Iran, said one of the sources.

Tehran is also offering Indian buyers a discount on price if refiners raise purchases, the sources said.

"The more you buy, the more incentives you get. If a refiner buys 30 million barrels of Iranian oil in a year then the discount translates to 25 cents per barrel," this source added.

Iran already offers 90 days' credit on crude sales to Indian refiners while most other producers stick to 30 days' credit.

While any discount would be attractive as India tries to curb an oil import bill that was around $170 billion in 2012/13, it likely would be wary of raising imports just prior to a review of its waiver from US sanctions.

India's six-month exemption comes up for renewal in early December, shortly after top US energy diplomat Carlos Pascual's current visit to New Delhi.

Sources have said the United States is unlikely to allow Iran's exports to rise before a deal is struck with Tehran. Both sides involved in the Geneva talks have said a breakthrough was far from certain.

India so far looks well on track to meet US conditions to renew its waiver. Daily imports from Iran slid 34 per cent in June-September from the six months between December 2012 and May 2013, data from trade sources shows.

India is one of Iran's few remaining clients along with other Asian buyers China, Japan and South Korea.

In India, there is about $5.3 billion of Iranian oil money held up by the sanctions. Of the total, about $1.8 billion is with the oil companies who have bought crude from Iran and the remainder is held with a bank, sources said.

In South Korea, total Iranian money stuck in bank accounts is more than $5 billion, a source with direct knowledge of the matter said.

In Japan, a similar amount of Iranian oil money has been held up since the beginning of the year, according to sources.

Iran offers to ship crude to India for free to boost sales: Reports - The Economic Times
 
Surge in supply helps bring prices down short-term...

Oil falls after industry report shows surge in U.S. crude stocks
Tue Oct 20, 2015 - Oil prices fell on Wednesday after data from an industry group showed a larger-than-expected build in U.S. crude inventories last week, fanning worries over global oversupply, even as a slightly weaker dollar provided some support. Brent crude for December delivery had fallen 9 cents to $48.62 a barrel by 0313 GMT after settling up 10 cents in the previous session.
U.S. crude for December delivery dropped 24 cents at $46.05 a barrel after settling up one cent at $46.29. The November contract, which expired on Tuesday, finished down 34 cents at $45.55 per barrel. "Concerns over the potential for a further build (in U.S. crude stocks) in official data (were driving prices lower)", said Michael McCarthy, chief market strategist at Sydney's CMC Markets. "The low volumes and market moves are reflecting that," he said. Industry data showed U.S. commercial crude stocks climbed by a larger-than-expected 7.1 million barrels to 473 million barrels in the week to Oct. 16, the American Petroleum Institute said on Tuesday. Analysts had expected a 3.9 million barrels increase. The U.S. Energy Information Administration is due to release official inventory data later on Wednesday, which is expected to show a build in crude stocks for a fourth straight week.

r

A technician of Cuba's state-run CUPET works on an oil pump in Mayabeque province, Cuba​

It was a surprise crude stocks had continued to climb even as the number of rigs had fallen, from about 800 six months ago to 600 now, McCarthy said. [RIG/U] "Clearly this is not helping the oil bulls," he said. China's crude imports will continue to grow over the next five years at an average annual rate of 3.2 percent, BMI Research said in a report on Wednesday. "We forecast China's crude oil imports will climb steadily over the next five years, from 6.6 million barrels per day (bpd) in 2015 to 7.7 million bpd by 2020. This will be a result of higher domestic refinery run rates and continued strategic stockpiling activities, which will boost demand for crude imports," the report said.

China's implied oil demand fell slightly in September to 10.13 million bpd, down 0.1 percent from a year ago, according to Reuters calculations based on preliminary government data. Investors are also eyeing the outcome of a meeting of oil experts later on Wednesday involving members of the Organisation of the Petroleum Exporting Countries and non-OPEC oil producers. With ex-Soviet oil producers, including Russia and Azerbaijan, unlikely to bow to pressure to reduce output in an effort to lift prices there is little chance of a deal between the two sides, industry experts said.

Oil falls after industry report shows surge in U.S. crude stocks
 
Oil drops below $29/bbl...

Oil plunges below $29 on prospects of more Iranian crude, China worries
Fri Jan 15, 2016 - World oil prices slumped more than 6 percent to below $29 a barrel on Friday, as a further fall in the Chinese stock market and the prospect of an imminent rise in Iran's crude exports deepened fears of a longer supply glut.
After closing higher for the first time in eight sessions on Thursday, U.S. and Brent crude futures slumped to new 12-year lows, taking this year's losses to more than 20 percent, the worst two-week decline since the 2008 financial crisis. The slump was not over yet, some analysts warned, as the lifting of sanctions on Iran opens the door to a wave of new oil. The International Atomic Energy Agency (IAEA) is expected later on Friday in Vienna to issue its report on Iran's compliance with an agreement to curb its nuclear program, potentially triggering the lifting of Western sanctions.

Shares in China, the world's No. 2 oil consumer, tumbled on Friday, with the Shanghai index ending down 3.5 percent to its lowest close since December 2014 and the yuan weakening sharply offshore. Adding to fuel demand concerns, U.S. data showed retail sales fell and industrial production weakened in December. The "ongoing worries regarding the pace of economic growth" spurred a new round of selling in the oil market, said Tim Evans, energy futures specialist at Citi Futures.

r

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma​

Brent futures for March delivery fell $1.94 to $28.94 a barrel, a 6.3 percent loss, by 12:41 p.m. EST (1741 GMT), after touching a session low of $28.82, the lowest since February 2004. U.S. crude fell $2.01 to $29.19 per barrel, a 6.4 percent loss, after hitting a contract low of $29.13, its lowest since November 2003. Even before Iran's sanctions are lifted, Iran's oil exports were on target to hit a nine-month high in January. Tehran is expected to target India, Asia's fastest-growing major oil market, as well as its old partners in Europe with increased exports once sanctions are lifted.

Despite oil prices hovering around new multi-year lows, analysts say that prices have not hit the bottom just yet, with demand likely to ease in coming weeks, especially with refiners beginning to shut for routine spring maintenance. A further fall in prices "cannot be excluded", said Commerzbank analyst Carsten Fritsch told Reuters Global Oil Forum. He warned that $25 a barrel "is quite possible, but not much lower than that." The oil price collapse has hammered currencies from commodity-producing nations and spooked financial markets as investors worry about the health of the global economy.

Oil plunges below $29 on prospects of more Iranian crude, China worries

See also:

Wall Street hammered; S&P 500 hits lowest since Oct 2014
Fri Jan 15, 2016 - U.S. stock indexes notched deep losses in volatile trading on Friday, with the S&P 500 hitting its lowest since October 2014 and the Dow losing more than 500 points, as oil prices dived below $30 per barrel.
All 10 major S&P sectors were in the red and all 30 Dow components lower. The Russell 2000 small-cap index fell as much as 3.5 percent to its lowest since July 2013. The beaten-down energy sector's 4.43 percent slide led the declines, as oil prices fell 6.5 percent. The technology sector was down 4.31 percent, as Intel's weak report weighed heavily on chip stocks. "Investors are scared to death, and the fact that it's happening at the beginning of year has some historical significance," said Phil Orlando, chief equity market strategist at Federated Investors in New York. At 13:01 p.m. ET (1801 GMT), the Dow Jones industrial average was down 448.5 points, or 2.74 percent, at 15,930.55. The S&P 500 was down 52.35 points, or 2.72 percent, at 1,869.49.

The Nasdaq Composite index was down 159.40 points, or 3.45 percent, at 4,455.60. The three main indexes were set to test their percentage declines on Aug. 24 when the market plunged after China devalued the yuan. The S&P 500 has fallen 13 percent and the Dow 13.7 percent from their highs in May, pushing them into what is generally considered as 'correction territory'. The CBOE volatility index jumped as much as 29.2 percent to 30.95, it's highest since September. "When we started off the year, we were at the crossroads of concern and optimism and clearly, we've gone down the road of concern pretty quickly," said Dan Farley, regional investment strategist at U.S. Bank Wealth Management in Minneapolis.

Dow components Exxon and Chevron were down 2.5-4 percent, while Caterpillar dropped 4.4 percent. Intel tumbled 10 percent to $29.48, its steepest drop in seven years, after the chipmaker's results and forecast raised concerns about its growth. That weighed on the chip index, which fell 5.8 percent, its steepest drop since March. Citigroup was down 7.5 percent at $41.99, while Wells Fargo fell 4.6 percent to $48.29, after reporting largely in-line quarterly earnings. Wynn Resorts was the among the very few bright spots, rising 7.4 percent to $55.29 after reporting in-line of quarterly revenue.

U.S. economic data on Friday was also not very encouraging, with an unexpected drop in retail sales and industrial output declining again in December, underscoring a worsening outlook for fourth-quarter economic growth. "It depends on where we close today, but things could get worse before it gets better," said Art Hogan, chief market strategist at Wunderlich Securities in New York. Declining issues outnumbered advancing ones on the NYSE by 2,850 to 240. On the Nasdaq, 2,527 issues fell and 289 rose. The S&P 500 index showed no new 52-week highs and 135 new lows, while the Nasdaq recorded four new highs and 477 lows.

Wall Street hammered; S&P 500 hits lowest since Oct 2014
 
Last edited:
NEW DELHI: Iran is offering free delivery of crude to major client India, industry sources said, signalling that tough Western sanctions which have slashed its exports in half are driving Tehran to increasingly desperate measures to keep oil flowing.

The United States has yet to ease the pressure on Asian buyers to continue reducing purchases from the OPEC member, even though Iran and world powers began two days of talks on Thursday hoping to reach a "first step" towards ending the decade-old standoff over Tehran's disputed nuclear programme.

The drop in exports is costing Iran billions of dollars in lost revenue every month. Tehran is also unable to repatriate most of the money earned from oil it does manage to sell, as the sanctions have cut off bank transfer facilities, crippling its economy by choking off its biggest revenue stream.

Despite the near halt of petrodollar payments, Iran is resorting to measures such as offering deep discounts on oil and now free delivery to India, according to sources who requested anonymity because of the sensitivity of the issue.

Iran's remaining Indian clients - Mangalore RefineryBSE 3.95 % and Petrochemicals Ltd, Essar OilBSE 0.27 % and Indian Oil Corp - could save freight of 70 cents to $1 a barrel on purchases from Iran, said one of the sources.

Tehran is also offering Indian buyers a discount on price if refiners raise purchases, the sources said.

"The more you buy, the more incentives you get. If a refiner buys 30 million barrels of Iranian oil in a year then the discount translates to 25 cents per barrel," this source added.

Iran already offers 90 days' credit on crude sales to Indian refiners while most other producers stick to 30 days' credit.

While any discount would be attractive as India tries to curb an oil import bill that was around $170 billion in 2012/13, it likely would be wary of raising imports just prior to a review of its waiver from US sanctions.

India's six-month exemption comes up for renewal in early December, shortly after top US energy diplomat Carlos Pascual's current visit to New Delhi.

Sources have said the United States is unlikely to allow Iran's exports to rise before a deal is struck with Tehran. Both sides involved in the Geneva talks have said a breakthrough was far from certain.

India so far looks well on track to meet US conditions to renew its waiver. Daily imports from Iran slid 34 per cent in June-September from the six months between December 2012 and May 2013, data from trade sources shows.

India is one of Iran's few remaining clients along with other Asian buyers China, Japan and South Korea.

In India, there is about $5.3 billion of Iranian oil money held up by the sanctions. Of the total, about $1.8 billion is with the oil companies who have bought crude from Iran and the remainder is held with a bank, sources said.

In South Korea, total Iranian money stuck in bank accounts is more than $5 billion, a source with direct knowledge of the matter said.

In Japan, a similar amount of Iranian oil money has been held up since the beginning of the year, according to sources.

Iran offers to ship crude to India for free to boost sales: Reports - The Economic Times


see what a good thing my fellow US citizens have done for India, Vik? ---enjoy
all the oil you want------in fact try to store some of it------somewhere. The AXIS
powers are not going to remain friends for much longer. Remember-----both India and Italy begin with the same ---(well in English) LETTER "" I "" -----------
and ideas that always begin with "" I """ never work out in the long run. For the
Italian view point on being one of the AXIS powers during world war II ----find
an intelligent Italian and DISCUSS it------carefully and politely
 
^ Israel too begins with I :)

I think Iran, Italy and Israel will make a nice axis power :)
 
^ Israel too begins with I :)

I think Iran, Italy and Israel will make a nice axis power :)

you are being childish, Vik The "I" to which I referred has a deeeep
mystical meaning 000------ask SIDDHARTHA
 

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