Baku, Azerbaijan, Oct.13
By Leman Zeynalova – Trend:
Iranian barrels are declining fast, and Saudi Arabia’s promise to balance the market will face a reality check in a month’s time, the US JP Morgan Bank said in its report obtained by Trend.
The Kingdom’s oil minister stated that KSA is producing 10.7mbd in Oct’18 and that it is providing every barrel requested by the consumer/buyer.
"However, after taking 10.7mbd in our balances we agree that markets are just flat when we assume 0.8mbd of Iranian barrels out of the markets in 4Q18, and by 1Q19 we forecast at least 1.5mbd of Iranian exports out of the market."
Iranian crude export has declined to 1.6 mbd in Sep’18 as major importers scaled back significantly. Initial estimates suggest China, Iran’s largest crude buyer, surprisingly reduced imports by 145 kbd followed by Japan, which scaled back by 139 kbd to a mere 22 kbd in Sep’18 based on Bloomberg data.
India, on the other hand, raised imports by 80 kbd to 488 kbd.
JP Morgan Bank believes India is front-loading and will reduce imports from Iran to less than half of what it is currently importing.
"There is a risk that those imports could go down to zero in the next few months while India waits for further clarity on US sanctions on Iran and whether it can manage to get any waivers. This implies that more than 500 kbd of supply is at risk (after including India, EU, Turkey, and Japan from their current levels) once US sanctions come into force on 04 Nov."
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