28 Mar 2024
Tuesday 28 July 2015 - 16:38
Story Code : 173716

Asian buyers set to size up Iran barrels

TEHRAN (ISNA)- The prospects for the return of Irans oil supplies to the global crude market after sanctions against it are eventually lifted are already raising speculations that the country could eventually end up in a price war with other producers like Saudi Arabia, Iraq and the UAE.

Many believe that while the same price war could lead to further price slides in markets, it will benefit Asias biggest consumers by giving them more pricing negotiation leverage.

Big consumers like China and India in particular are likely to benefit, Victor Shum, vice president at IHS Inc., an Englewood, Colorado-based industry consultant, has told Bloomberg.

Competition will intensify, he emphasized.

South Korean companies are specifically seen as major beneficiaries. Some of them including SK Innovation Co. had to go as far as Mexico and Alaska to buy oil after sanctions on Iran forced it to reduce imports from the country by almost half from 2011.

We will aggressively assess economic aspects to decide how much to import from Iran in the future, said Chang Woo Seock, head of the corporate planning office at SK Energy Co., a unit of SK Innovation Company.

Irans Oil Minister Bijan Zangeneh has already emphasized that the country will boost shipments by as much as 500,000 barrels a day immediately after sanctions are removed.

This is expected to push prices down further to the benefit of big Asian consumers for which cheaper oil has been a blessing as it has helped them cut budget deficits and boosting emergency crude stockpiles.

JX Nippon Oil & Energy Corp., Japans biggest refiner, has announced that it welcomes the lifting of sanctions on Iran as leading to stable supply and a wider choice of crude.

Iran coming into the market will mean a further slide in oil prices and countries like India will be a major beneficiary, Bloomberg has quoted Indias Oil Minister Dharmendra Pradhan as saying on July 15.

By ISNA
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