Competition is growing in Russia’s biggest oil market. While Saudi Arabia’s encroachment in Europe is getting all the attention, the biggest threat comes from another part of the Middle East -- Iran.
The world’s largest oil exporter has started shipping crude to traditional Russian markets like Poland and Sweden, but Saudi supplies to Europe won’t increase by enough to reduce prices, said Texas-based consultant Stratfor.
In contrast, a surge in Iranian exports after the lifting of sanctions could erode the value of Russian shipments to the region as soon as next year, according to KBC Advanced Technologies.
Iran may roil global oil markets with plans to sell about 45 million barrels of fuel stored in tankers in the Persian Gulf within three months of the removal of sanctions on its economy, according to analysts.
Most of the stored oil is condensate that contains a sulfur compound, which complicates sales because many refineries can’t process it, said Victor Shum of IHS Inc. and Robin Mills at Dubai-based Manaar Energy Consulting. To market this large amount of oil within three months -- the equivalent of about half a million barrels a day -- Iran will have to resort to offering deep discounts, they said.
“Iran’s getting ready to open the taps,” Shum, IHS’s head of oil market research, said by phone on Oct. 26. “If they want to unwind this supply in the current weak market, they’ll have to offer discounts. It’s a buyer’s market.”
Russia's Energy Minister has offered gas supplies to Iran as part of a swap agreement with the Middle Eastern country.
The politician said the Kremlin-controlled gas producer Gazprom was also considering other possible deals.
The country has been looking to boost its efforts to foster political and economic ties with Tehran.
Iran’s oil minister sees no imminent change in OPEC’s output strategy even as he urged fellow members of the group to cut their collective production to buoy crude to a range of $70 to $80 a barrel.
Iran is preparing to ramp up its own output once world powers remove sanctions on its economy, regardless of any decisions by the Organization of Petroleum Exporting Countries, Oil Minister Bijan Namdar Zanganeh told reporters Monday at an industry conference in Tehran.
“No one is happy” with prices at current levels, he said. “OPEC should decide to manage the market by reducing the level of production,” Zanganeh said. “It seems that the atmosphere is not well for making a change in the market.”
OPEC member states should cut crude output to boost prices to a range of $70 to $80 a barrel, Iran’s Oil Minister Bijan Namdar Zanganeh said.
“No one is happy” with prices at current levels, Zanganeh told reporters in Tehran.
“OPEC should decide to manage the market by reducing the level of production.” Even so, Zanganeh said he doesn’t expect the Organization of Petroleum Exporting Countries to decide to reduce output when its ministers meet next in December.
The world is awash in crude, but big oil companies are lining up to develop new fields in Iran even as they slash spending and abandon exploration elsewhere. One thing explains this paradox: cost.
Iran’s parliament has voted to support implementing the nuclear deal it struck with world powers, sending the measure to a council of senior clerics who will review the accord before its final approval.
Lukoil PJSC, Russia’s second-largest oil producer, plans to sign a deal on exploration and production with Iran following changes in the Persian Gulf nation’s tax laws.
Vagit Alekperov, Lukoil’s billionaire chief executive officer, said he plans to meet with Iran’s Oil Minister Bijan Namdar Zanganeh when the Organization of Petroleum Exporting Countries gathers in Vienna in December.
A bill to pass the 40-year-old ban on US oil exports has been passed by the Senate Banking Committee.
The bill, which was sponsored by Democrat Senator Heidi Heitkamp from North Dakota, passed 13 to 9.
The politician was the only person from the Democrats to vote for the measure.
The Chancellor of the Exchequer plans to lead a trade delegation to Iran next year if the country stays committed to a nuclear deal with other world powers.
According to the Financial Times, the move would be made after six world powers agreed earlier this year to lift sanctions in return for the Islamic Republic accepting long-term curbs on a nuclear programme.
Iran’s supreme leader says world powers must lift international sanctions and not merely suspend them as part of a landmark nuclear agreement.
Speaking to a group of clerics, Ayatollah Ali Khamenei said “there will be no deal” if the sanctions are not lifted. His remarks were read by a state TV anchorman.
Iran expects to finalise the wording for a new model for international oil contracts in the next three weeks, the oil minister said on Monday, as Tehran seeks to boost recovery from its fields with the help of foreign companies.
The ministry is expected to present the new oil contracts to investors at a conference in London in December, ahead of a likely lifting of international sanctions in 2016.
"Iran has put together a new model for oil contacts that allows access to regional and international markets and paves the way for long-term strategic cooperation with major companies," Oil Minister Bijan Zanganeh was quoted as saying by the Shana news agency.
Iran's Oil Minister Bijan Zanganeh blamed the latest drop in oil prices on some members of OPEC and questioned whether any OPEC emergency meeting would reach an agreement, the oil ministry's news agency Shana reported.
"To balance the oil price... OPEC members should balance their production. An emergency meeting has been requested and we don't have a problem with that," Shana cited Zanganeh as saying.
Royal Dutch Shell will repay a $2 billion debt to the National Iranian Oil Company (NIOC) when sanctions on Iran are lifted and will consider investing in the country's vast energy sector, Shell's boss for new business said.
Much would depend on the terms offered by the Islamic Republic once sanctions were lifted, said Edward Daniels, Shell's executive vice-president for commercial and new business development. He was speaking to Reuters while on a British government visit to reopen the country's embassy in Tehran.
"We are very pleased to have been part of this historic delegation. Clearly Iran remains under sanctions with time before sanctions will be unwound and clearly we will be absolutely adhering to all sanctions," Daniels said.
Britain must tread carefully in its newly thawed relationship Iran, but the two countries can work together to defeat Islamic State (IS) militants, Foreign Secretary Philip Hammond has suggested.
Oil in London slid below $45 a barrel for the first time since March 2009 as Iran reiterated it will boost production and U.S. drillers showed no signs of slowing.
Brent futures fell as much as 2.7 percent, extending a 7.3 percent drop last week, the most in five months. Iran will expand output “at any cost” to defend market share, Oil Minister Bijan Namdar Zanganeh said, according to his ministry’s news website. The number of active oil rigs in the U.S. rose for the seventh time in eight weeks, Baker Hughes Inc. data showed Friday.
Iran's Oil Minister, Bijan Zanganeh, said on Sunday that holding an emergency OPEC meeting may be "effective" in stabilising the oil price, Iran's oil ministry news agency Shana reported.
Algeria said earlier this month that the Organization of Petroleum Exporting Countries could hold an emergency meeting to discuss the drop in oil prices but other OPEC delegates said no meeting was planned.
"Iran endorses an emergency OPEC meeting and would not disagree with it," Zanganeh told reporters in Tehran, according to Shana.
Iran's Oil Minister Bijan Zanganeh said on Sunday that South Korea has agreed to increase its purchases of Iranian oil after a nuclear deal with world powers cleared the way for an easing of international sanctions on Tehran.
United States President Barack Obama promised Democrat politicians the US will continue to put economic pressure on Iran - and keep military options open - if his administration’s nuclear deal with Tehran goes through.
Norway's DNO ASA, which has operations across the Middle East, would like to do business in Iran if sanctions against the country are lifted as planned, the energy company said on Thursday.
Oslo-listed DNO has its biggest operation in Iraqi Kurdistan, where it produced about 153,000 barrels of oil per day in the second quarter. It is also present in Oman, Yemen, Somaliland, Tunisia and the United Arab Emirates.
OPEC could potentially boost crude oil production to 33 million barrels a day, the most ever, after international sanctions are removed against Iran amid a global supply glut, according to the country’s OPEC representative.
The global oil market is already in surplus by about 3 million barrels a day, with Saudi Arabia and Iraq responsible for OPEC’s oversupply in the past six months, Iran’s state-run Islamic Republic News Agency reported Sunday, citing Mehdi Asali. Iran can boost output by 500,000 barrels a day within one week after sanctions are lifted, Oil Minister Bijan Namdar Zanganeh said earlier this month.
Iran has selected 45 oil and gas projects to show international companies at a conference in London in December when new oil contract models will be discussed ahead of exploration auctions to double the country’s crude output.
Oil fell to a six-month low in London as Iran vowed to boost production immediately after sanctions are lifted and manufacturing in China slowed.
Brent futures declined as much as 2.6 percent, extending an 18 percent drop in July that was the biggest in seven months. Iran can raise output by 500,000 barrels a day within a week of sanctions ending, the state-run Islamic Republic News Agency reported.
A Chinese private factory gauge released on Monday fell to a two-year low in July, while an official index on Saturday slipped to the lowest in five months.
