Iranian tankers stranded by threat of US sanctions

A tanker prepares to dock at the Iranian oil facility on Kharg Island, in the Gulf. (AFP)
Updated 13 September 2018
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Iranian tankers stranded by threat of US sanctions

  • Two Iranian oil tankers floating off the UAE for a month as US sanctions take effect
  • The build-up in Iranian oil supplies underscores the pressure that Iran is facing as Washington aims to bring Iranian oil exports down to zero

DUBAI: Two tankers carrying Iranian condensate, a type of ultra-light oil, have been floating off the UAE for about a month as demand for the oil fell ahead of US sanctions.
The tankers, carrying about 2.4 million barrels of South Pars condensate combined, were stranded after South Korea halted imports from Iran and China’s demand fell during summer, according to industry sources and shipping data.
The build-up in Iranian oil supplies underscores the pressure that Iran is facing as Washington aims to bring Iranian oil exports down to zero to force Tehran to re-negotiate a nuclear deal.
The Very Large Crude Carrier (VLCC) Felicity loaded condensate at Iran’s Assaluyeh port in early August and then set sail for Jebel Ali in the UAE, shipping and trade flows data on Thomson Reuters Eikon showed.
It arrived at the ship-to-ship transfer area off Dubai on Aug. 7 and has been anchored there since. Similarly, the Suezmax tanker Salina also loaded oil at Assaluyeh and has been circling in the same area off Dubai since Aug. 17, according to the data.
Oil processors in South Korea, Iran’s top customer for South Pars condensate, halted Iranian oil liftings in July as banks, insurance and shipping companies wound down business related to Iran before US sanctions on the country’s petroleum sector kick in on Nov. 4. China typically cuts South Pars condensate imports in the summer because of its foul smell, the sources said.
The condensate contains high levels of a sulfurous compound known as mercaptans that require additional processing by refiners to remove. “Taking a cargo to China now when China may not want it means it may lose a cargo to India,” a US-based trader said. “So the cargoes will stay in place until they need to leave on agreed delivery period.”
Emirates National Oil Company (ENOC), another buyer of Iranian condensate, has been asked by the UAE government replace Iranian supply with imports from other countries, one of the sources said.
The National Iranian Oil Co. and ENOC did not respond to requests for comment. The number of ships loaded with Iranian oil and anchored off the loading port of Kharg Island and the Souroush oil field has also risen.
Three supertankers capable of carrying 2 million barrels, the Happiness I, MT Hedy and Humanity, have floated for 10 days or more while another four have been there for less than a week. Iran’s August crude and condensate exports fell to 67.7 million barrels, the lowest since April 2017, according to data from Thomson Reuters Oil Research and Forecast.


OECD warns of global economic slowdown

Updated 21 November 2018
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OECD warns of global economic slowdown

  • ‘We urge policy-makers to help restore confidence in the international rules-based trading system’
  • Trade tensions have already shaved 0.1-0.2 percentage points off global GDP this year

PARIS: The global economy has peaked and faces a slowdown driven by international trade tensions and tighter monetary conditions, the Organization for Economic Cooperation and Development warned Wednesday.
The OECD, which groups the top developed economies, said it had trimmed its growth forecast for 2019 to 3.5 percent from the previous 3.7 percent.
The 2018 estimate was left unchanged at 3.7 percent.
For 2020, the global economy should grow 3.5 percent, it said in its latest Economic Outlook report.
“The shakier outlook in 2019 reflects deteriorating prospects, principally in emerging markets such as Turkey, Argentina and Brazil,” it said.
“The further slowdown in 2020 is more a reflection of developments in advanced economies as slower trade and lower fiscal and monetary support take their toll.”
OECD chief Angel Gurria highlighted problems caused by trade conflicts and political uncertainty — an apparent reference to US President Donald Trump’s stand-off with China which has roiled the markets.
“We urge policy-makers to help restore confidence in the international rules-based trading system,” Gurria said in a statement.
Trade tensions have already shaved 0.1-0.2 percentage points off global GDP this year, the Economic Outlook report said.
If Washington were to hike tariffs to 25 percent on all Chinese imports — as Trump has threatened to do — world economic growth could fall to close to three percent in 2020.
Growth rates would drop by an estimated 0.8 percent in the US and by 0.6 percent in China, it added.
For the moment, the OECD puts US economic growth at 2.9 percent this year and 2.7 percent in 2019, unchanged from previous estimates, but trimmed China by 0.1 percentage point each to 6.6 percent and 6.3 percent.
It warned that “a much sharper slowdown in Chinese growth would damage global growth significantly, particularly if it were to hit financial market confidence.”
Laurence Boone, OECD Chief Economist, said “There are few indications at present that the slowdown will be more severe than projected. But the risks are high enough to raise the alarm and prepare for any storms ahead.”