End of Sanction Waivers

7 hours ago, Guillaume Albasini said:

This ship sailed also under  Sierra Leone, Togo and Panama flag among others... And changed the name nine times since last August.

Well, at least TOGO has a serious blue-water navy, and thus qualifies as a legitimate maritime power, not like Bolivia.  The Togolese navy consists of a handful of coastal patrol boats, two of which date back to 1976 and are made of wood, and another three that are 100-foot steel hulls.  The "air force"  has eight trainer aircraft and three propeller-driven trainers.  And the army has an "elite presidential guard" unit that is apparently led and trained by none other than Benjamin Yeaten, an internationally wanted Liberian military commander and war criminal.

Sounds like a good place to go register a ghost tanker that runs hot cargo. If you are wanted by Interpol, well, now you know to head for Togo. 

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9 minutes ago, Jan van Eck said:

Well, at least TOGO has a serious blue-water navy, and thus qualifies as a legitimate maritime power, not like Bolivia.  The Togolese navy consists of a handful of coastal patrol boats, two of which date back to 1976 and are made of wood, and another three that are 100-foot steel hulls.  The "air force"  has eight trainer aircraft and three propeller-driven trainers.  And the army has an "elite presidential guard" unit that is apparently led and trained by none other than Benjamin Yeaten, an internationally wanted Liberian military commander and war criminal.

Sounds like a good place to go register a ghost tanker that runs hot cargo. If you are wanted by Interpol, well, now you know to head for Togo. 

The Togo registrar is managed by a private company called "International Registration Bureau" with two main offices in... Lebanon and Greece, and deputy registrars in Dubai, Cyprus, Sweden, Miami, Panama, China, Hong Kong, South Korea, Japan, Vietnam, Philippines, Brazil, Argentina,  Russia, Ukraine, and Cayman Island.    http://www.togoregistrar.com/about

 

A huge registrar for a small country with just a small 55 km coastline !

 

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The US said on Monday that it won’t extend the sanctions waivers for eight countries importing crude oil from Iran. The move could remove around 1.1 million bpd from the market.

Although Rystad Energy anticipated a further tightening of sanctions, the details in the announcement have led us to revise our forecast downward for Iranian crude production.

Rystad Energy forecasts that production will drop to 2.27 million bpd for the second half of 2019, reaching this level by July 2019, which equates to a drop of 0.43 million bpd from current March 2019 levels.

The net effect for the oil market is bullish, as the market will lose more supply from Iran, mostly of medium-sour and heavy-sour quality.

“However, Saudi Arabia and several of its allies have more replacement barrels than what would be lost from Iranian exports in a worst case scenario. This should limit the positive impact on crude prices,” says Rystad Energy Head of Oil Market Research, Bjørnar Tonhaugen.

“Since October 2018, Saudi Arabia, Russia, the UAE, and Iraq have cut 1.3 million bpd, which is more than enough to compensate for the additional loss. However, realistic spare capacity will be cut significantly, reducing room for error in Libya, Nigeria, and Venezuela,” Tonhaugen added.

Rystad Energy, the independent energy research and consultancy in Norway with offices across the globe, says that Iranian crude exports have dropped from around 2.5 million bpd in April 2018 to around 1.1 million bpd currently.

“In our new base case, we no longer expect India to buy Iranian oil after May 2019, and now only expect China and Turkey to continue purchasing Iranian cargoes. We lower our Iranian crude exports estimate from 900 000 bpd to 600 000 bpd from May 2019 onwards, allocating around 500 000 bpd of exports to China and the remainder to Turkey,” Tonhaugen remarked.

The density and sulfur content of the main crude grades exported by the “four cutters” – Saudi Arabia, UAE, Iraq and Russia – are of similar quality to Iran’s main export grades, Iranian Heavy and Iranian Light.

“Saudi Arabia, Russia, the UAE, and Iraq will have no problem replacing Iran’s crude grades, such as Iranian Heavy, Iranian Light, and West Kharoon,” Tonhaugen said. “We believe that Saudi Arabia has ample capacity of Arab Light especially, which is a grade of similar quality to Iranian crudes, due to the current production cuts. Russian Urals and Iraq’s Basra Light is also comparable to Iranian crude quality, while UAE’s main export grades are somewhat lighter and sweeter than Iran’s.”

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It is very likely that IRAN close Strait of Hormuz and oil price goes up. the international economy will face of unequilibrium.  

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2 hours ago, almojtahed said:

It is very likely that IRAN close Strait of Hormuz and oil price goes up. the international economy will face of unequilibrium.  

It would certainly interesting globally if Iran tries to close the Strait of Hormuz.

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On 4/28/2019 at 12:44 AM, almojtahed said:

It is very likely that IRAN close Strait of Hormuz and oil price goes up. the international economy will face of unequilibrium.  

It is also very likely that if Iran does pull that off to begin with that would cause a serious threat and disruption, their current navy maybe future man made coral reefs!

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I believe that Saudi Arabia and Russia would not increase quotas for sometime in the event  that President Trump decides to reverse sanctions

on Iran in an attempt to ketch the market  off guard like he did the last time causing prices to tumble.. It is also clear to me as well that the American Shale Industry is unable to meet the shortfall created by those sanctions at this time because of continuing inefficiency and profitability which is decreasing their rig count and production contrary to what is touted about the dominance of that industry

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9 hours ago, Gerard Remy said:

I believe that Saudi Arabia and Russia would not increase quotas for sometime in the event  that President Trump decides to reverse sanctions

on Iran in an attempt to ketch the market  off guard like he did the last time causing prices to tumble.. It is also clear to me as well that the American Shale Industry is unable to meet the shortfall created by those sanctions at this time because of continuing inefficiency and profitability which is decreasing their rig count and production contrary to what is touted about the dominance of that industry

Gerard Remy,

This old quote springs to mind  ' Fool me once, shame on you, fool me twice, shame on me ! '

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13 hours ago, Gerard Remy said:

I believe that Saudi Arabia and Russia would not increase quotas for sometime in the event  that President Trump decides to reverse sanctions

on Iran in an attempt to ketch the market  off guard like he did the last time causing prices to tumble.. It is also clear to me as well that the American Shale Industry is unable to meet the shortfall created by those sanctions at this time because of continuing inefficiency and profitability which is decreasing their rig count and production contrary to what is touted about the dominance of that industry

Gerard

Shale production is quicker than any other oil/gas resources to be developed into production stage. There are thousands of DUC's in the US shale patch, which if and when completed will boost the oil output rapidly and in a high volume.

 

___________________________

E&P Earnings Recap: US Shale Producers Kick Off 2019 With Strong Returns

 

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13 hours ago, Gerard Remy said:

...that the American Shale Industry is unable to meet the shortfall created by those sanctions at this time because of continuing inefficiency and profitability which is decreasing their rig count and production contrary to what is touted about the dominance of that industry

@Gerard RemyThat is correct, sir. If it were incorrect, and US shale oil could "dominate" the world oil order, why would Trump be begging OPEC for supply increases? He would be telling the US shale oil phenomena to ramp itself up, bring down oil prices and dominate America.  

There are 8,500 drilled but uncompleted wells in America's shale oil basins that cost between $25-30 billion dollars to set pipe on, and are just sitting there doing nothing but accruing interest. The price of oil averaged $67 WTI last year; is the shale oil industry waiting for higher oil prices? The facts are a lot of these DUC's are years old and are a.) booked PUD reserves awaiting expensive plugging and decommissioning and those reserve assets will have to be impaired, written off soon, when plugged,  b.) are awaiting plug backs, with additional costs, to different benches,  c.) are gassier than hell and what good is that? and d.) do not justify, economically, completing when frac'ing costs are another $4MM each The parent/child fiasco has turned a lot of DUC's into dead-ducks. All those proximity based PUD reserves will also get impaired and make debt to asset ratios worse than they already are.

All and all, nobody in their right mind would spend their own money on drilling and not completing a well. That  $25-30 billion dollars of CAPEX with no revenue stream is OPM and its another example of how fiscally irresponsible the US shale oil industry is. 

Nobody yet has kicked butt 1Q19; Exxon and CVX American upstream were a disappointment, Anadarko lost money, Continental's margins went way down and COP is an integrated company around the world with lots of ways to make money, including this quarter, a $700MM settlement with Venezuela. You are right to be skeptical. 

 

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Turkey Looks Beyond Iranian Barrels

Apr 30, 2019 10:55:01 AM EST
 

Back in 2014, amid sanctions on Iran, Turkey was importing around 100,000 barrels per day of Iranian oil. Imports doubled to over 200,000 bpd in 2017, before the re-imposition of sanctions by the United States late last year. 

The drop in crude imports both this year and in 2014 compared to 2017 levels is a reflection of the severity of Washington’s sanctions:

image.png.4792854af459c0667ea55a9be34c76ea.png

Ankara, just like Beijing, objected vocally to the end of US waivers on imported Iranian oil, giving the impression they may not abide with the US decision. “Turkey rejects unilateral sanctions and imposition on how to conduct relations with neighbors,” said Turkish Foreign Minister Mevlut Cavusoglu in a tweet on April 22.

Even though countries with waivers have continued to pull in Iranian crude over the last six months, they have reduced the number of barrels received from Iran and diversified their suppliers. Given what we see in our flows data, it appears that Iranian oil importers were aware that waivers may not be renewed prior to Washington's announcement on April 22. 

 

So far this year, we have seen changes in Turkey’s crude oil sources, both in light and medium grades. We see Turkey importing more oil from Russia (medium), Kazakhstan (light), Libya (light), and Nigeria (light and medium) compared to 2018.

Of those barrels, Russia has been exporting significantly more to Turkey this year. In March, Turkey imported over 200,000 bpd of Urals, the highest monthly pace on our records.

Compared to last year, crude from Nigeria and Libya has been more or less continuous over the first four months of the year. From January to April of last year, we did not see Turkey importing any Libyan crude, unlike this year when imports averaged 24,000 bpd. Nigerian exports so far this year are up about 16 percent compared to the same period last year.

Iraqi flows have also shown a dramatic change in trend. Turkey’s imports of Basrah Light averaged 38,000 bpd in the first four months of last year, but have doubled in 2019 to average 80,000 bpd:

Turkey 2

In April 2018, Turkey imported an average of 240,000 bpd of Iranian crude oil. So far this month, Turkey has imported less than half that volume, with flows only likely to come under further downward pressure from here.

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On 4/28/2019 at 3:40 AM, Tom Kirkman said:

It would certainly interesting globally if Iran tries to close the Strait of Hormuz.

The problem for Iran is that their Persian Gulf terminals are all north of the Strait of Hormuz. If they shut down the strait, they will be hurting themselves more than others. However, I can sure see them using their little fast attack bass boats to intimidate traffic through the strait. Oil markets are assuming that Iran will simply react passively to these oil sanctions and be happy with what they can ship out through the Caspian Sea and via pipelines. What if OPEC is happy with current output levels in hopes of $80+ oil and what if Iran stirs up trouble? Being long on oil for the month of May sure seems wise especially if the price wants to fall just as we enter this window of great and immediate uncertainty.

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