31 October 2024 Kpler
Oil prices eased this week as the threat of an Israeli strike on Iranian oil facilities diminished, with Iran quickly resuming exports to 1.3 Mbd after a brief slowdown. The first-ever crude load from Iran's Jask terminal, bypassing the Strait of Hormuz, marked a significant development. Meanwhile, Saudi Arabia and the UAE have increased exports through alternate routes, while Iraq improved its OPEC+ compliance despite overstated claims of Kurdish output cuts. Light sweet crude differentials face pressure due to refinery outages in Asia and rising US production, which is set to reach new highs.
Oil prices have retreated this week as the likelihood of an Israeli strike on Iranian oil facilities diminishes. The US administration, China, and regional powers like Saudi Arabia and the UAE have reportedly intervened to prevent such an escalation. This aligns with our previous assessment following Iran’s missile launch on Israel, where we argued that retaliation on oil facilities – particularly export-focused installations – was unlikely.
Iran’s oil exports, which had slowed at the beginning of October, possibly in anticipation of a potential Israeli attack, have since rebounded with activity returning to normal levels and exports back to 1.8 Mbd in the past week. Tehran likely received assurances that its oil installations would not be targeted, bolstering its confidence to increase exports. After a brief dip, Iran’s exports have picked up pace, and mtd loadings now average 1.4 Mbd. Although this remains below last month’s record of 1.85 Mbd under US sanctions, it is not far from the yearly average of 1.54 Mbd.
Iran oil exports by origin ports, kbd
A notable development is the first-ever load from Jask, Iran’s newest oil terminal designed to bypass the Strait of Hormuz. The VLCC Dune loaded 2 Mbbls of crude from Jask in early October, which we estimate occurred on 2nd October , just one day after Iran’s strikes on Israel. While the terminal was inaugurated in 2021, it remains partially under construction. Currently, 10 operational storage tanks provide a total capacity of 5 Mbbls, with another 10 tanks expected to come online in the coming months, doubling storage capacity. Out of the terminal’s projected 1 Mbd pipeline capacity, which transports crude from the Goureh pumping station in the southwest to Jask in the southeast, we estimate only 500 kbd are operational.
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