South Korea suspends Iranian oil loading in July for first time since 2012
South Korea will not lift any Iranian crude and condensate in July, halting all shipments for the first time in six years amid US pressure to cut all imports of Iranian oil from November, sources familiar with the matter said on Friday. Japanese customers, however, are continuing to import for now, with multiple buyers considering buying Iranian oil through September loading, said a North Asia trading source familiar with Iranian oil shipping arrangements. The move by South Korea, one of Iran’s main customers in Asia along with China and Japan, comes as it is in talks to seek an exemption from US curbs on buying Iranian oil, in line with a waiver it received during previous sanctions. “There was pressure from the South Korean government to halt purchases,” said the source familiar with Iranian shipping arrangements. “South Korea overall is lifting zero oil (from Iran) for July loading.” Two other sources said South Korea cancelled July loadings of crude and condensate cargoes from Iran as it was uncertain whether the country would receive an exemption from U.S. sanctions on Iran trade. The cancellations mean South Korea will import no Iranian oil in August, the first month of zero imports since August 2012 when South Korean buyers put Iranian oil purchases on hold before getting a waiver to import limited amounts of Iran crude. The United States in May said it was walking away from an international deal on Iran’s nuclear programme. In late June, it demanded its allies halt all imports of Iranian oil from November and said exemptions were unlikely. South Korean refiners have since curtailed their Iranian oil purchases and turned to alternative sources such as American and African crude due to expensive Middle East grades and uncertainty over trade with Iran. South Korean buyers of Iranian crude and condensate are SK Energy and SK Incheon Petrochemical, owned by SK Innovation , Hyundai Oilbank and Hanwha Total Petrochemical. Japan, which reduced Iranian oil imports significantly during the previous Western sanctions on Tehran that were lifted in 2016, is also seeking an exemption from the latest US sanctions on Iran. “Japanese buyers also nominated cargoes for August, though they were not allowed to buy additional crude on top of term contractual volumes,” the shipping source said. Japanese oil refiners may have to stop loading Iranian crude oil from October 1 if the government does not secure another exemption, the president of the Petroleum Association of Japan said last month. Jorge Posada Authentic Jersey
EXPLAINED: Strait of Hormuz – the world’s most important oil artery
With a third of the world’s sea-borne oil passing through it every day, the Strait of Hormuz is a strategic artery linking Middle East crude producers to key markets in Asia Pacific, Europe, North America and beyond. This week, an Iranian Revolutionary Guards commander threatened that Tehran will block oil shipments through the waterway in response to U.S. calls to ban all Iranian oil exports. The Strait has been at the heart of regional tensions for decades and this is not first time that Tehran has made such threats. WHAT IS IT? – It is a waterway separating Iran and Oman, connecting the Gulf to the Gulf of Oman and the Arabian Sea. – It is 21 miles wide at its narrowest point, but the shipping lane is only two miles wide in either direction. WHY IT MATTERS? – The U.S. Energy Information Administration estimates a record 18.5 million barrels per day of sea-borne oil passed through it in 2016, a 9 percent increase on flows in 2015 which accounted for 30 pct of all sea-borne traded crude oil and other liquids during the year. – Most of the crude exported from Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq passes through it. It is also the route for nearly all the liquefied natural gas (LNG) from lead exporter Qatar. – Throughout the Iran-Iraq war (1980-1988) the two sides sought to disrupt each other’s oil exports in what was known as the Tanker War. – The U.S. Fifth Fleet, based in Bahrain, is tasked with protecting the commercial ships in the area. – Energy consultants Petromatrix who track U.S. aircraft carriers in the region say there are currently no carriers in the Arabian Gulf. They add the carrier that could have made the short trip to the Gulf from the eastern Mediterranean, turned around to sail back to the Atlantic. – “Under the Bush administration there was always one to two carriers in the Arab Gulf, under the Obama administration there were some short times when the Arabian Gulf was left with no carriers but that was gestures made while the U.S. was negotiating with Iran,” the said on July 5 PIPELINE ALTERNATIVES – The UAE and Saudi Arabia have sought to find alternatives to bypass the strait. INCIDENTS IN THE STRAIT – In July 1988 the U.S. warship Vincennes shot down an Iranian airliner, killing all 290 on-board, in what Washington said was an accident after crew mistook the plane for a fighter. Tehran called it a deliberate attack. The U.S. said the Vincennes was in the area to protect neutral vessels against Iranian navy attacks. – In early 2008 the United States said Iranian boats had threatened its warships after they approached three U.S. naval ships in the Strait. – In June 2008, Revolutionary Guards commander-in-chief, Mohammad Ali Jafari, said Iran would impose controls on shipping in the Strait if it was attacked. – In July 2010 a Japanese oil tanker called M Star was attacked in the Strait. A militant group called Abdullah Azzam Brigades, which is linked to al Qaeda, claimed responsibility. – In January 2012, Iran threatened to block the Strait in retaliation for U.S. and European sanctions that targeted its oil revenues in an attempt to stop the nuclear program. – In May 2015, Iranian ships fired shots at a Singapore-flagged tanker which it said damaged an Iranian oil platform, causing the vessel to flee, and seized a container ship in the Strait. – On July 3, 2018, President Hassan Rouhani hinted Iran could disrupt oil flows through the Strait in response to U.S. calls to bring down Iran’s oil exports to zero. – The following day, a Revolutionary Guards commander spelled out that Iran would block all exports through the Strait if Iranian exports are stopped Miami Dolphins Jersey
Petrol, diesel price hiked for 1st time in more than a month
Petrol and diesel prices were today hiked for the first time in more than a month on the back of rising international rates and weakening rupee. The increase of 16 paisa a litre in petrol and 12 paisa per litre in diesel came after an 8-day self-imposed hiatus in rate revisions by state-oil firms in anticipation of softening international rates due to OPEC decision to raise output by 1 million barrels per day. The price of petrol in Delhi climbed to Rs 75.71 per litre from Rs 75.55 and diesel to Rs 67.50 a litre from Rs 67.38, according to price notification of Indian Oil Corp (IOC). The three state-owned fuel retailers, IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had not revised petrol and diesel prices since June 26. “We had not changed prices for a few days in anticipation OPEC decision to raise production leading to softening of international rates. But the 1 million barrels of additional production, which was to kick-in from July, has been overdone by the Iran issue,” IOC Chairman Sanjiv Singh told here. While the OPEC last month decided to raise production, the US is piling pressure on India, China, and other buyers to end all imports of Iranian oil by a November 4 deadline in a bid to choke the Persian Gulf state’s economic lifeline with sanctions over its nuclear programme. Singh said Iran produces around 2.3 to 2.5 million barrels per day and the world searching for alternates to replace those volumes has put pressure on the prices. The decision to hold on to rates was taken without any elections looming around, he said, adding international prices have risen post-OPEC decision and oil companies have to “adjust retail rates accordingly”. State-owned oil firms, who had in mid-June last year dumped 15-year practice of revising rates on 1st and 16th of every month in favour of daily price revisions, had last changed prices on June 26 when petrol price was cut by 14 paise and diesel by 10 paise. In the preceding month, or so rates had been cut in line with dropping international rates. Prices had hit an all-time high of Rs 78.43 a litre for petrol and Rs 69.31 per litre for diesel on May 30. That peak had triggered demands for a reduction in excise duty but the government had ruled out any immediate cut. The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) – the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel. Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel. The central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre. This led to its excise collections from petro goods more than doubling in last four years – from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18. States saw their VAT revenue from petro goods rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18. Clayton Geathers Jersey
Oil prices fall as Trump demands OPEC “reduce pricing now”
Oil prices fell on Thursday after U.S. President Donald Trump sent a tweet demanding that OPEC reduce prices for crude. Brent crude futures were at $77.78 per barrel at 0137 GMT, down 46 cents, or 0.6 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were down 16 cents, or 0.2 percent, at $73.98 per barrel. Trump late on Wednesday accused the Organization of Petroleum Exporting Countries (OPEC) of driving up fuel prices. “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!” Trump wrote on Twitter. “With contentious midterm U.S. elections looming, the President continues to strong-arm Saudi Arabia to increase oil supplies which, at least for now, is containing price action below WTI $75 per barrel,” said Stephen Innes, Head of Trading for Asia/Pacific at futures brokerage OANDA. OPEC together with a group of non-OPEC producers led by Russia started to withhold output in 2017 to prop up prices. Recent price rises have also been spurred by a U.S. announcement that it plans to re-introduce sanctions against Iran from November, which will also target its oil industry. “A key driver of the rise in prices has been the OPEC-Russia deal to cut oil output, compounded by collapsing Venezuelan production and the U.S. decision to end the Iran deal,” National Australia Bank (NAB) said in its July outlook. Ship brokerage Banchero Costa said Iran’s crude oil production was currently around 3.8 million barrels per day (bpd), but added “there is the risk of production decreasing going forward as exports are again affected by renewed sanctions implemented by the U.S.” OPEC and Russia announced in June they were willing to raise output to address concerns of emerging supply shortages due to unplanned disruptions from Venezuela to Libya, and likely also to replace a potential fall in Iranian supplies due to U.S. sanctions. NAB said its oil price forecasts “point to Brent spending the next few months largely in the mid-to-high $70s (per barrel) range, although meaningful OPEC-Russia output increases could push prices lower later in the year and higher U.S. shale production should impose an upside limit on WTI.” Meanwhile, U.S. crude oil production has soared by 30 percent in the last two years, to 10.9 million bpd. That means just three countries, Russia, the United States and Saudi Arabia, meet a third of global oil demand. Ryan Spooner Jersey
Explorers resume oil, gas search as prices perk up
A growing fleet of ships is scanning oceans in search of new oil and gas fields as energy companies, now with more cash thanks to stronger crude prices, gradually resume spending on seismic services after a four-year downturn. A doubling in the area contracted for seismic work in the first quarter this year from the last three months of 2017 has injected optimism into surveillance firms, with a global fleet of about 24 vessels, most of whom struggled to survive in the past years. But they say the road to recovery remains bumpy with producers big and small not keen on drilling for new reserves unless oil prices, which have more than doubled from 2016 lows, stay high for at least a year. Still, with crude prices stabilising well above $60 a barrel in the past six months, companies including mid- and small-sized independents such as Woodside Petroleum Ltd, Kosmos Energy Ltd and Tullow Oil PLC have helped boost demand for surveillance. The total area tendered by upstream companies for seismic work doubled to 40,000 square kilometres in the first quarter this year from October-December last year, said Duncan Eley, chief executive officer at Polarcus which owns a seismic fleet. “That’s positive in isolation,” said Eley, keeping his optimism in check even as he pointed to a busy fourth quarter for geophysical work in Asia Pacific, particularly for gas with demand forecast to soar in coming decades. Gas projects in Myanmar could take two to three vessels from the global fleet, while there are also potential activities in Malaysia, Australia, India and Papua New Guinea, where Exxon Mobil and Total plan to feed more gas into their existing liquefied natural gas infrastructure, Eley said. That marks a stark change from the dark days of 2015 and 2016 when orders for geophysical survey work came to a grinding halt as oil prices plummeted from over $100 a barrel to less than $50. Petroleum Geo Services (PGS), the world’s largest seismic operator, was also seeing better opportunities now than last year. “The recent increases we’ve seen are primarily driven by Africa and Brazil when it comes to bidding for contract work,” said Bard Stenberg, PGS’ senior vice president for investor relations and communication. Demand for geophysical data at producing oil and gas fields, also known as 4D seismic survey, has also increased as explorers sought to maximise output from these assets, the two executives said. PGS expects to secure between 20 and 25 4D seismic jobs this year, up from 16-17 in 2017, Stenberg said, with most of it located in the North Sea, West Africa and Brazil. OIL PRICE IS KEY The increased work should help improve the company’s earnings which remain well below pre-crisis levels. PGS’s current margins on its contracts for seismic ships are breakeven on EBITDA (earnings before interest, tax, depreciation, amortization) basis, versus EBIT margins of nearly 30 percent in 2013, said Stenberg. For earnings to grow and for producers to start drilling for new resources, oil prices will have to hold at current levels for at least another 12 months, company executives and analysts say. “For us, more than $60 is a positive and more than $70 is a bonus in terms of our clients’ sentiment,” Eley said. Right now, financiers “would rather see funds go towards development activities rather than exploration,” said Readul Islam, senior analyst at Rystad Energy, adding drilling can cost far more than collecting seismic data, running up to hundreds of millions of dollars for a well. “At least for the next year or so companies will run their economics on projects around $60 oil, so investment in greenfield projects will not change that much,” said Kevin Robinson, vice president of Malaysian oil and gas service company Sapura Energy. The global flood of U.S. oil is also limiting interest in finding new oil and gas reserves, and restraining the rush for geophysical surveys. The United States is on course to be the world’s largest oil producer this year, overtaking Russia and Saudi Arabia, spurred by its growing shale oil output and exports. “There’s no question that there’s a good sense of optimism and confidence is backed by the (oil) price,” said Visal Leng, the Asia-Pacific President of oilfield services provider Baker Hughes GE. “But having said that, we see that U.S. production will continue to be a bit of a disruptor in global supply.” Lamar Jackson Womens Jersey
Industries given 90 days to switch to approved fuels
Delhi Pollution Control Committee (DPCC) has notified the “approved” fuels in the capital, which include cleaner options like BS-VI petrol and diesel, CNG, LPG, aviation turbine fuel and biogas. The notification, which seeks to eliminate a range of dirty fuels to reduce toxic emissions from industries, transport and domestic sectors, also grants 90 days to the industries to switch to the approved options, following which action will be taken against violators. The list also includes firewood for crematoriums, wood charcoal for tandoors, grills and ironing, and refuse-derived fuels for waste-to-energy plants. Coal with low sulphur (less than 0.4%) can be used only in thermal power plants. The notification also said any other clean fuel specified by the Delhi government could be added to the list. All other fuels will be deemed “unapproved” for use in the national capital territory of Delhi. Welcoming the decision, experts said it was a right step to control pollution in Delhi. “Dust particles in the air get coated with toxic substances from combustion and can go deep into the lungs. Cleaner fuels for combustion are an important step forward to reduce the toxicity of emissions,” said Anumita Roy Chowdhury, executive director (research and advocacy) at Centre for Science and Environment (CSE). According to CSE, the notification virtually eliminates the use of coal from everything except in power plants. “With other dirty fuels like petcoke and furnace oil also banned, industrial units will have to shift to cleaner options,” Roy Chowdhury said. Christian Covington Womens Jersey
No fuel tax cut, will stick to deficit target: Jaitley
The government does not intend to go easy on its fiscal deficit targets by easing taxes on fuel or by spending more during an election year. Union minister Arun Jaitley said on Tuesday that the government would stick to its fiscal deficit targets this year and not go in for panic reaction in response to crude oil prices or volatility in the foreign exchange market. Speaking at State Bank of India’s 5th banking conclave Jaitley described the increase in international oil prices as `artificial’ and `transient’. “A large number of suppliers do not have the strength to hold on at that level of supplies. They also need revenues based on their oil resource and therefore our whole attitude must be one where we have restraint. We have patience and we have the economic strength to deal with it,” said Jaitley. The Union minister’s statement comes on the back of criticism that the government is profiteering through high taxes on petrol and diesel and there is growing pressure on the government to cut taxes on fuel. “Pressure is being built to go in for panic reaction and to throw fiscal discipline to the winds. But the consequences of that will be a remedy worse than the problems,” said Jaitley. Reiterating that there was no additional pressure on spending this year being an election year, Jaitley said that every year in India is an election year. The union minister also indicated that the pressure on the rupee was arising out of the trade war between US and China. He said that India having chosen to be part of global economy is impacted by it. “Therefore, when China moderates its currency there is a significant impact on Asian economies and their currencies. We saw that in 2015 when the Chinese devalued their currency. For a couple of weeks, we found that the shake-up also impacted us. But because our fundamentals were strong, within a few weeks we were back on the normal range of where the rupee should be,” he said. Tim Brown Jersey
BP offloads 1 mn barrel of Angolan oil to Chinese refiner after 2 months on water: Sources
Oil major BP discharged 130,000 tonnes, or nearly 1 million barrels, of Angolan crude to a Chinese independent refiner last week, after holding the oil on water for more than two months amid slowing Chinese demand and multi-year high oil prices, sources with knowledge of the offloading said on Wednesday. Texas, a supertanker charted by BP carrying about 2 million barrels of Angolan crude, discharged part of the cargo in mid-April at Qingdao and was slated to offload the rest at Rizhao, another port in Shandong, shortly after. Instead, the tanker had been anchored off the coast until last week, when it discharged at the Rizhao terminal 130,000 tonnes of Cabinda crude to Shandong Qingyuan Group. Qingyuan, which is based at Linzi in the province of Shandong and operates a 5.2 million-tonne-per-year (104,000-barrel-per-day) refiner, is a regular customer of BP which has expanded its crude oil marketing to Chinese independent refiners over the last three years. Qingyuan has received an annual crude import quota of 4.04 million tonnes, and is one of the largest independently-run lubricant producers. Josh Gorges Womens Jersey
Exclusive: Japan’s Inpex delays production from giant Australia gas project
Japan’s Inpex has delayed gas production from its giant Ichthys field off the coast of Australia just weeks after giving assurances that output would start imminently. Inpex’s new chief executive officer said the company was yet to start churning out gas from the $40 billion project and did not give a timetable for when that would happen. Japan’s biggest oil and gas producer had said on June 1 that commissioning of all onshore and offshore facilities at the much-delayed project was complete and that gas would start flowing within a week or two. “There are various minor issues to address in the final safety checks … but there are no major problems with the facilities,” Ueda, 61, said on Tuesday in his first interview with overseas media since taking the helm at Inpex last month. The liquefied natural gas (LNG) project, already hit by multiple delays, is a major test for Inpex as it marks the first time it has operated a major energy development on its own. “We can start production in the not too distant future,” Ueda said, without giving details. He added that the company is keeping its target to ship its first LNG cargo by the end of September. Delays are common with large projects like Ichthys, but the development has been plagued by a wide range of issues, including contractor disputes, technical difficulties and bad weather. At full operation, Ichthys is expected to produce 8.9 million tonnes of LNG a year, along with about 1.7 million tonnes of liquefied petroleum gas and around 100,000 barrels per day of condensate, an ultra-light form of crude oil.
Saudi Aramco plans to change Asia crude oil price formula
Saudi Aramco plans to change the formula used to price its long-term crude oil sales to Asia starting from October, multiple trade sources said on Wednesday. The new formula will be based on the average monthly prices of Oman crude futures traded on the Dubai Mercantile Exchange (DME) and the average cash price for Dubai assessed by pricing agency S&P Global Platts, instead of the average of Oman and Dubai prices assessed by Platts, the sources said. Saudi Aramco is expected to officially notify customers in Asia later on Wednesday, the sources said. Saudi Aramco, DME and Platts could not be immediately reached for comment. The DME launched the Oman contract in 2007 and it is the most liquid physically deliverable futures contract for Middle East crude oil. In comparison, there are rarely bids or offers for Oman cargoes during the Platts market-on-close price assessment. “There won’t be a big difference in terms of prices as the values between Platts Oman and DME Oman are pretty close,” a trader with a North Asian refiner said. Saudi Aramco’s decision could improve liquidity for Oman futures trading on the DME and also for derivative instruments based off the Oman contract for hedging or price conversion purposes, a Singapore-based trader said. “This is a good change as Platts Oman cannot be hedged,” he said. Clyde Drexler Jersey