Iran seen losing 500,000 barrels of oil shipments daily

Business Materials 16 May 2012 16:21 (UTC +04:00)

Iran's oil exports have the potential to fall another 300,000 to 500,000 barrels a day or more when the European Union's embargo takes effect in July, Reuters reported referring to Barclays Plc.

The decline will extend existing losses of 500,000 barrels a day, Barclays analysts led by Helima Croft in London said in an e-mailed report yesterday.

Iranian exports may fall even further because of the unavailability of shipping insurance, she said.

"The risk from the lack of shipping reinsurance is that in a market in which fundamentals are set to tighten in coming months, any loss of Iranian output sustainably beyond 1.5 million barrels a day can provide a significant upside to prices," the analysts said.

The EU banned the purchase, transportation, financing and insurance of Iranian oil. That affects 95 percent of the world's tankers because they're covered by the 13 members of the London- based International Group of P&I Clubs.

The U.S. and EU are trying to pressure Iran over its nuclear program, which they say is aimed at producing atomic weapons. The government in Tehran, facing four sets of United Nations sanctions, says the project is for civilian purposes.

Edited by: S. Isayev