TEHRAN, Iran, May 4
Trend:
Coronavirus spread and oil price crash have led to reduced production at refineries around the world and Iran is no exception, member of Iranian Oil and Petrochemical Products Exporters' Union Vahid Sheikhi told Trend.
"The coronavirus pandemic also led to interrupted international transportations via ships, planes, trains and other vehicles and, thus, halted fuel consumption, while excess fuel remains at refineries," he said. "In this situation, the production volume at refineries decreased. The reservoirs in ships can store crude oil, but until today, about 80 super tankers have loaded 2 million tons and due to the coronavirus, the refinery industry in Iran and the world has faced serious losses."
"Crude oil extraction can not be stopped; therefore, crude oil should be put for sale. The US oil price stands at -$40 for the future contracts, and even in the daily trade, it continues to be sold up to $2; the reason for reduced demand was prediction of oil price's drop for next months, while the costs of storing oil is high, so companies prefer not to pay the costs," Sheikhi said.
"If the coronavirus situation improves due to warm weather, some damages will be compensated and fuel consumption will increase; otherwise, the oil price will sharply decline," Sheikhi added.
"The reduced production is observed at all refineries in all countries including Iran, as the coronavirus pandemic led to reduced consumption of fuel and decline of travel and trades operations," he said.
"The OPEC situation in global market is confusing, the market is not stable. As for Iran's oil sale in the situation when other countries can trade oil at low price, Iran's condition is critical since it was sanctioned and even prior to the current crisis, it was not easy to purchase oil from Iran," he added.