Russian crude oil, with its good quality and highly discounted price, is strongly competing with Iran in the Asian market. According to Reuters, Iran’s crude oil exports to China have fallen sharply since the conflict. The conflict in Ukraine broke out because Beijing prioritized highly discounted Russian barrels. Currently, as much as 40 million barrels of Iranian crude oil lies in the middle of the sea, waiting for buyers.
US and European sanctions have forced Moscow’s oil to move east. China quickly seized this opportunity, while cutting imports from Iran and Venezuela, two countries also under sanctions.
Các bồn chứa dầu và khí đốt tại một kho dầu thuộc cảng ở Chu Hải, Trung Quốc (Ảnh: Aly Song/Reuters).
According to data, as of mid-May, about 20 tankers of oil from Iran are anchored near Singapore. Some have been waiting here since February, but the number of Iranian tankers forced to dock increased sharply in April as more Russian oil supplies flowed to Asia.
Data and analytics firm Kpler said that from early April to mid-May, the amount of Iranian oil waiting offshore near Singapore increased from 22 million barrels to 37 million barrels.
The US ban on oil imports from Russia and the European Union is considering a similar ban that is pushing Moscow’s oil tankers to Asia.
“Russia can move half of its exports to Southeast Asia, especially to China. Russia’s move is a potential threat to Iran’s crude oil exports,” said Hamid Hosseini, a member of the board of directors of the Union of Oil, Gas and Petrochemical Products Exporters of Iran.
Iran’s oil industry has been troubled for years by US sanctions against Tehran’s nuclear program. Iran relies on oil sales to China to save its economy.
In March, it was estimated that oil exports from Iran to China were between 700,000 and 900,000 bpd (bpd). By April, however, that had dropped by 200,000 to 250,000 bpd, said Iman Nasseri, Middle East regional director for consulting firm FGE.
Kpler said Iran exported an average of 930,000 bpd, mainly to China in the first quarter. Meanwhile, the rough estimate for April is 755,000 bpd. However, Kpler said that the estimate could be adjusted due to the difficulty of tracking Iranian sales.
Russian oil is better
Homayoun Falakshahi, senior analyst at Kpler, said: “China is now buying more Ural oil from Russia. Ural exports to China have more than tripled despite China’s growing imports. weaken”. China is also the biggest customer of ESPO blend crude oil from Russia.
Xuất khẩu dầu thô của Nga sang các nước Châu Á tăng mạnh.
Iran and Russia have been in close contact in recent weeks to discuss how to buy and sell oil under the sanctions, three sources told Reuters.
A source said the Russian side wanted to find out how Iran navigates shipping, trade and banking, while the two sides also discussed the creation of joint companies, banks and funds.
Another source said more talks are planned when Russian Deputy Prime Minister Alexander Novak visits Iran next week.
However, the negotiations did not lessen the competition for buyers between Russia’s Ural oil and Iranian crude. In terms of quality, Iranian oil is generally heavier and has a higher sulfur content, making refining more expensive than the Russian product.
“No one is interested in Iranian crude anymore because the Russian goods are of good quality and the price is much lower. The sellers of oil in Iran are under great pressure,” said a trader at a refinery. China said.
This trader said that Ural oil sold to China is being discounted by $9 per barrel compared to Brent for June delivery. Therefore, Iranian oil must be discounted by $12 to $15 to compete.
“You can legally buy Russian oil at a discount, and Iranian oil continues to be subject to sanctions,” said one European trader.
Russian oil and refined products are also making their way into other markets, notably India and the United Arab Emirates (UAE). Russian fuel oil shipments to the UAE’s Fujairah storage hub are expected to grow to about 2.5 million barrels in May, about 125% higher than April levels.
Meanwhile, India has also increased its purchases of Russian crude oil. According to Kpler, as of early June, India will import more than 30 million barrels of oil from Russia in three months, more than double the amount imported for the whole of 2021.
T&G Import-Export Joint Stock Company
Address: 352 Hue Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
Hotline: 02473010868
Email: hrm@tginterjsc.com
Website: http://tgimportexport.co
