Expert: Removing Iranian oil from int'l markets impossible
Azerbaijan, Baku, June 11/Trend D.Khatinoglu/
Some 20 days after their start, the EU and U.S. sanctions on the Iranian oil and banking sector will take effect. This issue has already affected sales of Iranian oil, so that all its customers,
including China and Turkey, have reduced buying Iranian oil.
According to statistics, China, India, Japan, South Korea and Turkey, as the main importers of Iranian crude, have declined imports during the past two months by 22 percent, 38 percent, 28 percent, 22 percent and 11 percent, respectively.
Mehrdad Emadi, the advisor to the EU, in an interview with Trend, said that Greece, Italy and Spain, who are the main buyers of Iranian crude in the EU, have decreased orders for Iranian crude between 18 percent and 48 percent by April.
According to a OPEC report, Iran's crude output fell by 510,000 barrels per day in April compared to 2010. According to an IAE report, Iran's oil exports decreased to less than 2 million
barrels from 2.5 million barrels.
Over 70 percent of Iran's export-bound crude oil is destined for Asian markets.
Dr. Hooman Peimani, the head of the energy security section at the energy studies center of the National University of Singapore told Trend that Iranian oil is of high importance in
international markets, because some of the major Arab producers, such as Libya and Iraq, are grappling with internal wars, some other minor producers, such as Yemen and Sudan, have their own specific problems and the risk of spreading Arab Spring to other oil producing countries
According to the expert, there is no possibility to implement all the imposed sanctions against the Islamic Republic. It means that western nations will implement the sanctions. But major importers of Iranian crude in Asia, namely India and China, will continue buying oil from Iran. However, banking restrictions will reduce exports of Iranian crude.
Iran has set $85 per barrel for oil in the current year's budget law.
It has also envisaged exporting 2.4 million barrels of oil per day.
Oil price in international markets has sharply declined, reaching to less than $100 from $124 during the past months.
Peimani referred to the simultaneous decrease in exports and oil price and its effect on Iranian economy, saying that oil price decline depends on several short-term factors and the price may rise again.
"If sanctions take effect and eastern countries are obliged to reduce oil imports, the prices may rise again. Of course, this is not the whole story. Sanctions against Iran put forwards the possibility of tension between Iran and western countries, which in turn, contributes to a rise in prices," he said.
Peimani has referred to setting $85 oil per barrel in the budget act as a conservative figure, because even those countries which have helped reduce oil prices, such as Saudi Arabia, are inclined to see oil price stabilized at $100. So, Iran's evaluation from oil prices in the budget act has been realistic.
According to him, unsold Iranian crude oil, as a result of sanctions, will be exported in the long-term to Asian countries, as China has announced that it will not implement oil sanctions against Iran.
Moreover, there are many ways to circumvent the sanctions. Oil can be dealt without using banks and need for fiscal transactions.
During the recent months, Iran has proposed oil importers to barter deals, using national currencies and gold instead of dollar and euro.