Iran & Libya oil exports falling

[dan_s]

On 6/28/2018, Reuters reported European refiners are cutting purchases of Iranian oil faster than expected as the U.S. prepares to impose sanctions on Iran, threatening a more severe impact than the last round of punitive measures in 2012 even though the E.U. has not joined in. Washington said that companies would have to wind down their activities with Iran by 11/4/2018 or risk exclusion from the U.S. financial system. Following President Barack Obama's sanctions in 2012, Europe imposed its own Iran oil ban.

This time, however, credit lines are getting cut off despite European leaders vowing to stick to the nuclear deal and European purchases are grinding to a halt. Europe accounted for about a fifth of Iran's 2.5 million b/d of crude exports. The U.S. has said it wants to deprive Iran of all oil exports, making exemptions unlikely. Russian oil major Rosneft (ROSN-NC) is also preparing to halt Iranian oil imports from November after a communication from the Kremlin. The company has already started cutting its oil imports from this month. Senior Trump administration officials have visited European nations this week and will head to the Middle East and Asia later to pressure countries to reduce their oil supplies from Iran.

On 6/28/2018, Reuters reported India's oil ministry has asked refiners to prepare for a 'drastic reduction or zero' imports of Iranian oil from November, two industry sources said, the first sign that New Delhi is responding to a push by the U.S. to cut trade ties with Iran. India has said it does not recognize unilateral restrictions imposed by the U.S. and instead follows UN sanctions. But the industry sources said India, the biggest buyer of Iranian oil after China, will be forced to take action to protect its exposure to the U.S. financial system. During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked due to the European and U.S. sanctions. While a State Department official has said that Washington wants Iranian oil buyers to halt imports from November, U.S. Ambassador to the United Nations Nikki Haley has told Indian Prime Minister Narendra Modi to lessen dependence on Iranian oil.

On 6/29/2018, Reuters reported Libya's National Oil Corporation (NOC) said on Friday it expects to declare force majeure on loadings from the eastern ports of Zueitina and Hariga from July 1, raising losses in output from a power struggle over oil exports up to 800,000 b/d. "This step will have to be taken due to insufficient storage capacity, and because the Libyan National Army (LNA) General Command has prevented legitimate allocations being loaded by blocking vessel entry to ports," the Tripoli-based NOC said in a statement. The move would cause an additional output cut of 350,000 b/d, increasing total losses from disruption at eastern ports to 800,000 b/d, the NOC said. Earlier this month fighting between the LNA and rival factions shut down the ports of Ras Lanuf and Es Sider, reducing production by around 450,000 b/d.