Is Iran no longer risk to oil price?

Is Iran no longer risk to oil price?

Baku, Azerbaijan, Nov. 8

By Leman Zeynalova – Trend:

The physical market will start to tighten once Iranian oil finds it difficult to reach customers, said the report released by the US JP Morgan Bank.

"The presence of Iranian barrels in the physical markets will be superfluous. The lack or difficulty in acquiring shipping insurance will help in reducing exports quickly as it did during the last international sanctions on Iran," said the report.

The Iranian crude export that is tracked and reported has come off since the US announced the re-imposition of sanctions earlier in May, according to the Bank.

"Iran’s oil exports have reduced from over 2.5mbd to closer to 1.6mbd recently. We expect the current administration to bring down the Iranian crude exports closer to zero shortly after the sanctions come into force. After the US mid-term elections, we would also expect Saudi Arabia and GCC allies to reduce supply slowly to allow the physical markets to absorb the excess crude first (other than Iranian barrels)," said the report.

Thanks to the high fiscal breakevens, JP Morgan believes Saudi Arabia would try to keep oil price supported closer to $80/bbl.

"An analysis of crude export weighted fiscal breakeven price for major gulf economies (Iran, Iraq, Kuwait, Qatar, Saudi Arabia and UAE) suggests optimal price level of ~$70.6/bbl. The group’s average price is below Saudi Arabia’s fiscal breakeven price which is just under $80/bbl this year. In the case of Saudi Arabia our regional analyst believes that fiscal deficit will continue to improve but they project the full year deficit at 3.3 percent with Brent assumed at $74/bbl in 2018," said the report.

The Bank continues to remain supportive of oil price from current levels as the risks are skewed to the upside in the presence of US sanctions on Iran and rising geopolitical risks globally.

"Finally, although demand outlook has turned negative according to the international agencies, it is largely macro driven as demand growth currently remains steady. Hence, any positive dialogue between US and China at the G20 summit should be supportive for oil," said the report.

The US government's sanctions against Iran came into effect on Nov.5. The sanctions are designed to target Iranian oil exports and the country's financial sector and are aimed at dissuading third countries from doing business with Iran.

---

Follow the author on Twitter: @Lyaman_Zeyn

Iran's Energy Exchange announces products to be on sale on May 19
Iran's Energy Exchange announces products to be on sale on May 19
Kazakhstan boosts petroleum oil exports to France
Kazakhstan boosts petroleum oil exports to France
Equinor closely working with Kazakh KazMunayGas on geophysical studies
Equinor closely working with Kazakh KazMunayGas on geophysical studies
Loading Bars
Latest
Brazil reports 2,513 more COVID-19 deaths
Gaza radicals fired 3,700 rockets at Israel since May 10 - Israeli military
U.S. COVID-19 vaccines effective against variant in India: expert
Argentina to extend COVID-19 curfew beyond May 21
Finland's parliament green-lights EU recovery fund
Number of COVID-2019 cases across globe up by over 515,000 in past day — WHO
Azerbaijani contestant Samira Efendi proceeds into Eurovision final (PHOTO/VIDEO)
Sudan bans travellers from India, imposes other COVID-19 restrictions
World's most expensive wine producer to start producing wine in Georgia
4 variants of COVID-19 found in Nepal
Algeria cancels plan to reopen land borders
Value of Turkish cars imported by China surges
France holds summit to help boost financing for Africa's recovery
Turkey to receive 90 mln doses of Pfizer vaccine
Sinovac to be available to individuals over 18 starting next week in Georgia
Iran’s non-oil export hits 46% growth in current year: IRICA
Uzbekistan and Kazakhstan finalizing negotiations on launching Silk Road Visa
Israel delivers 120 strikes at targets in Gaza Strip over past day
World Bank helping Georgia to develop SMEs
UK records another 2,412 coronavirus cases, 7 deaths
Retail turnover of computers, equipment in Azerbaijan grows since early 2021
Azerbaijani Finance Ministry places medium-term bonds on auction
Azerbaijani FM, Turkic Council Sec-Gen hold phone talks
Azerbaijani Agriculture Ministry to allocate funds for power supply of scientific research institute
Azerbaijani defense minister meets with delegation from Belarus (PHOTO/VIDEO)
Center under Azerbaijani Finance Ministry to allocate funds for maintenance
Azerbaijan discloses timeframe for putting 'Zarifa Aliyeva' vessel into operation
Iran’s Bahar Azadi gold coin price rebounds
Iran's Energy Exchange announces products to be on sale on May 19
Volume of ready-made clothes exported from Turkey to Austria up
Ministry discloses volume of cargo transshipped through Turkish Antalya port
Volume of cargo from South Korea transshipped through Turkish ports disclosed
Trading Economics reveals Georgia's inflation rate
Ministry discloses volume of cargo from Netherlands transshipped through Turkish ports
Ministry discloses volume of cargo transshipped through Turkish Samsun port
Volume of cement imported by US from Turkey disclosed
Uzbekistan, Russia's Kazan consider launching direct flights
Ministry discloses volume of cargo transshipped through Turkish Tekirdag port
Belarus, Azerbaijan demonstrating high level of interaction, cooperation today - President Aliyev
Azerbaijan traditionally been our friend and ally - Belarus defense minister
Export of Kazakh agro-industrial products notably grows in 2020
Kazakhstan reports multifold growth in container traffic
Turkey sees increase in exports of locally-made electrical goods to US
Ministry discloses volume of cargo transshipped through Turkish Zonguldak port
Number of client accounts in Azerbaijani banks increases
Azerbaijan to increase Virginia tobacco production
Turkey’s export of clothes to Uzbekistan up
Uzbek republican stock exchange reveals number of transactions for April 2021
New export opportunities to appear for locally produced beer – Azerbaijani minister
Georgia to establish snail meat plant, backed by Italian investment
Quarterly data on cargo shipment via Turkish Cesme port revealed
Royal Caribbean cancels all Israel cruises
Kazakhstan boosts petroleum oil exports to France
Equinor closely working with Kazakh KazMunayGas on geophysical studies
Russia's Ministry of Industry, Trade reveals data on joint projects with Turkmenistan
Uzbekistan, Netherlands consider establishing co-op in livestock breeding
Azerbaijan's ASCO opens tender for purchase of steel pipes
AZINNEX talks about Azerbaijan's potential to multiply technology exports by 2030
Russia closely following situation over Armenian-Azerbaijani border incident - MFA
Kazakhstan decreases raw sulfur production volumes
Uzbekistan notes increase in car sales
Georgia increases imports of electricity from Azerbaijan
Turkey announces substantial growth in cement exports to Uzbekistan
Iran to issue loans for dev't of beekeeping sector
Azerbaijan unveils number of citizens vaccinated on May 18
Turkey publishes quarterly data on cargo shipment via local ports from Spain
Azerbaijan confirms 432 more COVID-19 cases, 1,024 recoveries
Azerbaijan suspends import of poultry products from some countries due to bird flu
High revenues from State Oil Fund keep Azerbaijan's state budget surplus - WB
Indian DRDO’s 1st batch of anti-Covid drug 2DG launched
Kazakhstan’s Nostrum unveils oil extraction volumes for 1Q2021
Iran's private sector to start importing COVID-19 vaccine
Iran discloses volume of sprat caught from Caspian Sea
Restoring landscapes to reduce poverty gap in Georgia - WB
Georgian Credo Bank attracts funds from EFSE, GGF to support rural micro and small entrepreneurs
EBRD ready to expand co-op with Turkmenistan
Iran's NISOC to implement projects to collect flare gas
Azerbaijanis hold protest rally in front of UN Campus in Germany (PHOTO)
Revenues of Kazakhstan's Nostrum Oil & Gas down
Georgia sees increase in unemployment rate
Finnish Nokia interested in introduction of 5G technologies Uzbekistan
Turkey notes decline in export of grain, legumes to Turkmenistan
Lending to Azerbaijan's energy, chemistry & natural resources sector up
Value of Turkish chemicals export to Germany rises in 4M2021
Uzbekistan receives third batch of Chinese-Uzbek COVID-19 vaccine
Overview of Turkmen tourism sector's development
Iran’s GTC begins wheat purchasing in Razavi Khorasan Province
Lending to trade & services sector grows in Azerbaijan year-on-year
Iranian parliament issues statement on nuclear discussions
Azerbaijan competing with global leaders in export of high-tech products - AZINNEX
President Ilham Aliyev receives Belarus defense minister
Armenia's vandalism against Azerbaijan’s cultural heritage - flagrant violation of int’l law
Kazakh uranium extracting company opens tender to buy pipes
WB talks stabilization of consumer price index in Azerbaijan
Iran's capital market to increase support of refinery industry - Securities and Exchange Organization
Azerbaijan Railways announces increase in freight traffic
SME Development Centers holding free trainings for entrepreneurs in Azerbaijan
Vladimir Putin: Both parties to Israeli-Palestinian conflict need to end violence
Azerbaijan shares data on 4M2021 oil exports to Israel
Iranian contractors awaiting to build railway in Iraq's Basra
All news