Crude Price Competition to Intensify in Europe

Crude Price Competition to Intensify in Europe

Oil price competition in Europe is set to intensify when Iranian crude returns to the market after sanctions on its nuclear program are lifted, the International Energy Agency said.
Europe will be the battleground between producers of sour crude grades, including Russia, Iraq, Saudi Arabia and Iran, as the Asian market becomes more “crowded”, the Paris-based IEA said in its monthly report, Bloomberg reported.
Iraq, the second largest oil producer in the Organization of Petroleum Exporting Countries, has increased its market share in Europe after the imposition of sanctions on Tehran resulted in the collapse of Iranian exports, the IEA said.
Iraq sold 1 million barrels a day to Europe in July and August, overtaking Saudi Arabia, according to the IEA.
Europe imports over 9 million barrels a day of crude from outside the region, with sour grades accounting for two-thirds of that, according to the IEA.
“By targeting Iran’s former buyers, Iraq—with its fast growing exports—has managed to increase significantly its European customer base,” the agency said. Iraq’s gains in Europe have also come, as Saudi Arabia has pushed its barrels into new territories in the region.
Saudi Arabia sold crude to a Swedish refiner for the first time in 20 years earlier this month and has also made headway in Poland.
Both countries have traditionally bought their crude from Russia. Saudi Arabia, the biggest oil producer in OPEC, also cut official selling prices for all grades to northwest Europe and the Mediterranean earlier this month.
Despite these gains for Iraq and Saudi Arabia in the continent, Iran is “keen to reclaim” its market share, the IEA said. Sanctions on its nuclear program are widely expected to be lifted next year following a deal agreed with world powers in July.
“Tehran has already lined up buyers in Europe,” the IEA said, citing unidentified Iranian industry people. The nation’s crude would typically compete with that from Saudi Arabia, Iraq and Russia, the IEA said.
Iran plans to raise crude output by 500,000 barrels a day within a week after sanctions are lifted and by 1 million barrels within the following five months.
Sanctions curbed Iran’s sales of crude and condensate to 1.4 million barrels a day in 2014 from 2.6 million in 2011, according to the US Energy Information Administration.

Short URL : https://goo.gl/RAdnmR
  1. https://goo.gl/B317co
  • https://goo.gl/HWmr9K
  • https://goo.gl/f2JnPK
  • https://goo.gl/a7DOLI
  • https://goo.gl/ttdPCL

You can also read ...

Four solar plants, with a total capacity of 33.5 MW, have come on stream in Yazd Province.
The central Yazd Province’s solar power production capacity...
Currently, 80,000 barrels per day of crude are extracted from North Azadegan Oilfield.
The tender results for developing North Azadegan Oilfield in...
Russia, Turkey Sign Pipeline Agreement
Russian state gas giant Gazprom said on Saturday it had signed...
Novak: Oil Output Could Rise to October 2016 Level
A return to oil production levels that were in place in...
Annual Potable Water Consumption at 7.5 bcm
Potable water consumption amounts to a massive 7.5 billion...
SOCAR to Expand Gas Storage Capacity
There are plans to expand underground gas storage facilities...
Shell is a strategic partner of Petrobras in the pre-salt layer.
Shell was the only company expressing interest in purchasing...
The steady gas supply to neighboring states has caused international markets to trust Iran.
Natural gas exports experienced a 60% hike during the fiscal...