Asian oil traders—the largest group of buyers of Iranian crude—are not bothered by the prospect of new sanctions from Washington against Iran. Even if these do materialize, it would take months if not years to implement them, trading sources told S&P Platts.
One South Korean trader said, "We are not overly concerned because whatever Trump decides to do in May, it will still take many months [to fully implement the sanctions on Iran again] ... at least for 2018, Iran's exports would be unaffected. Any sanctions or supply issues beyond that, we can worry about later."
This philosophical attitude seems to be characteristic of other traders, too. A source from a Japanese refinery shared the sentiment: "We would think of our response when it comes to the point of not being able to take [Iranian crude] so there is no point of preparing for it from now."
For Chinese buyers, the news of the sanctions could actually be good, as one Chinese trader noted, saying if the U.S. imposes new sanctions on Iran, Chinese buyers will benefit from better prices as there will be much less competition for Iranian crude. In the worst-case scenario, there will be no change in Chinese imports of Iranian crude, another source from the Chinese oil industry said.
The comments come after President Trump said on Friday he had decided to extend—for the last time—the sanction waivers already in place until May 12. He went on to warn Congress and America’s European partners that they needed to “fix” the nuclear deal with Iran if they wanted to avoid the return of U.S. sanctions.
Iran currently exports over 2 million barrels daily—double its exports from before the nuclear deal. Almost two-thirds of the 2017 exports, or 62 percent, went to Asia. China was the largest buyer, followed by India, South Korea, and Japan. The rest of the exports went to Europe.
By Irina Slav for Oilprice.com
