This note in Ship and Bunker eases concerns that the January lifting of Iran sanctions will mean cheap oil as the oil producing nation seeks to recoup from losses stemming from the sanctions.
Excerpts: “Iran may have returned to the international oil stage, but cheap deals are not to be had for Europeans, and some former buyers are staying away due to Tehran’s inflexibility regarding prices, according to reports.
The expectation of low prices have escalated ever since the Islamic Republic stated it wanted to increase production by 1 million barrels per day to restore the market share it lost due to sanctions.
Bunker buyers have been watching the situation closely, with the anticipated post-sanctions flood of cheap Iranian oil threatening to sink already low bunker prices in some of the primary ports into double-digit territory.
But that no longer looks like it could happen, with trading sources telling Reuters that Iran won’t consider offering discounts on the grounds it would supposedly result in an escalation of a price war.
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These reports come on the heels of both Iran and Saudi Arabia increasing light crude prices for February delivery to Asia by $0.60 per barrel.
