Asian oil buyers, already sucking in barrels from as far away as Alaska and Mexico, are anticipating more bargains when Iran finally returns to world markets.
In a region that will account for more than half the growth in global oil demand this year, refiners are poised to be the winners, as the Persian Gulf state raises overseas sales when western sanctions are lifted, Bloomberg reported.
Iran’s Oil Minister Bijan Namdar Zanganeh has said he will woo Asian customers and seize market share.
Processors, including Hindustan Petroleum Corp. in India and Taiwan’s Formosa Petrochemical Corp., have signaled they may buy more from Iran. Cheap oil has been a boon for many Asian nations, helping to cut budget deficits by reducing fuel subsidies and boosting emergency crude stockpiles.
Six world powers and Iran reached an agreement on July 14 in Vienna, Austria, whereby sanctions against Iran are to be lifted in exchange for curbs on the country's nuclear program.
Formosa Petrochemical wants to restore supply from Iran to the full volume under its contract and will hold talks “soon” with the Persian Gulf state, spokesman Lin Keh-yen said from Taipei, without giving details.
JX Nippon Oil & Energy Corp., Japan’s biggest refiner, sees the lifting of sanctions leading to stable supply and a wider choice of crude, the company said in a statement.
“Iran coming into the market will mean a further slide in oil prices and countries like India will be a major beneficiary,” Indian Oil Minister Dharmendra Pradhan said.
Iran has signaled it wants to boost shipments by as much as 500,000 bpd immediately after sanctions are removed.
“We will aggressively assess economic aspects to decide how much to import from Iran in the future,” Chang Woo-seock, head of the corporate planning office at SK Energy Co., a unit of SK Innovation Co., South Korea’s biggest refiner, said.
Oil demand in the region will increase by 770,000 bpd in 2015 from a year earlier, accounting for more than half of the growth in global consumption, according to the Paris-based International Energy Agency.
“The Iran deal is good for the government, refiners and other customers, as this will lead to competition among producers,” B. Ashok, chairman of Indian Oil Corp., the country’s biggest refiner, said.
