With the lifting of international sanctions from Tehran, India would be able to recommence its unobstructed oil import from the Persian Gulf country. The chance of importing oil freely from Iran, which would be currently paid in US dollars, arrives at a time when worldwide prices are predicted to drop more with Iranian oil accumulating to the supply surfeit.
Shortly, Iran is anticipated to boost its oil export of 1.1 million barrels per day by 500,000. The sanctions were lifted from Tehran subsequent to the statement issued by US Secretary of State John Kerry confirming the verification by International Atomic Energy Agency that Iran has wholly executed the mandatory commitments, reports said quoting Indian Oil Corporation.
The continuing fall of oil prices with UK Brent crude closing Friday trading session below $29 per barrel was motivated by Iran's view of expanding its crude oil export. The Indian crude oil market closed Friday trading at 13 year low of $26.43 per barrel, The Economic Times said, citing official data.
The Indian Oil Corp's latest refinery in Odisha's Paradip commenced production of petrol from the Rs.34, 555-crore facility on Sunday. The Economic Times said that Indian Prime Minister, Narendra Modi, would donate the 15 million metric tonnes per annum refinery, which would mainly produce BS-VI fuels to aid the southeastern and eastern markets, to the country on February 7.
Iran intended to recover supply deals with its European partners to ramp up crude oil exports. Reuters said that before the sanction, Tehran was exporting nearly 800,000 bpd to its European partners like Spain's Repsol, Total Greek Hellenic petroleum of France, Italy's ENI and Royal Dutch Shell.
"Former clients of Iran are the ones who are likely to return as buyers... Italy, Spain and Greece were the top EU importers in 2011," according to Peter Sand, BIMCO's chief shipping analyst.
The Persian Gulf country will boost its oil production by 100,000 barrels per day, only after a month the sanctions being lifted, according to the average estimation done by 12 economists and analysts charted by Bloomberg. Last week, Hedge funds boosted bearish oil stakes to a record as worldwide equities drop and sanctions on Tehran were poised to be removed.
Gordon Kwan, analyst at Nomura Holdings, said Bloomberg that Tehran's surplus crude oil shipments have the capacity to lower prices further, to as low as $25 per barrel. According to Bloomberg, Tehran's emerge from international sanctions has made life worse for its Gulf Arab rivals.
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