Chinese Eager to Buy More Russian Crude Oil
Russia is on track to set a new record in crude oil exports this year, and Iran is boosting exports to Europe, intensifying competition on the continent, which is a Key market for both countries.
At the beginning of June, Russia has surprised analysts time over time by keeping Oil production at near-record levels throughout the rock bottom of the Crude Oil bust.
Not only has Russia managed to keep output at high levels, it has actively increased its exports to China and has managed to maintain its market share in other Key markets.
Russian Energy Ministry figures reveal a 4.9% increase in exports to 5.55-M BPD during 1-H of Y 2016 when compared to the same frame last year.
In June, the country’s output rose 1.14% from a year earlier, with total Crude Oil export figures on the rise during every month since Summer 2014.
If production remains steady, then it will likely be a record year for exports. Meaning competition is strong, especially with Iran sending more Oil into Southern Europe.
Organization of Petroleum Exporting Countries (OPEC) failed to agree on a plan to reduce the existing glut in Oil & Gas markets.
Iran has also been increasing production as it aims to regain market share after international sanctions against it were lifted earlier this year.
The year Y 2012 saw Europe banning Iranian Oil as a political reaction to the country’s secretive nuclear program. In the years that followed, Russian Urals Crude, a blend similar to Iran’s formula, became a popular alternative.
Last year, the European Council on Foreign Relations released a report outlining new energy sources for Europe.
The document called Russia an “unreliable partner” and suggested several Central European and Middle Eastern countries, including Iran and Iraq, as possible suppliers in the near future, albeit with logistical caveats.
“There are also infrastructural constraints, such as the geographical distribution of resources in Iran relative to its consumption, as well as the lack of production and export infrastructure,” it said. “Iran’s gas resources (for example, the South Pars field) are in the South. Therefore, substantial investment would be needed to bring Nat Gas as to the northwest to tap into Europe’s Southern Gas Corridor.”
The European Union might be skeptical about increasing its Crude Oil supply from Russia, but China seems to be keen on receiving more Russian Crude.
Russian Crude Oil exports to that part of the world have 2X’d Y-Y last April at the expense of Saudi Arabia and Iran.
|HeffX-LTN Analysis for OIL:||Overall||Short||Intermediate||Long|
|Neutral (-0.04)||Neutral (-0.01)||Neutral (-0.15)||Neutral (0.04)|
Latest posts by Paul Ebeling (see all)
- 24 Hours of LeMans, 12 Hours Report - June 15, 2019
- Ferrari’s (NYSE:RACE) 488 Pista Spider The Benchmark Opentop Supercar - June 15, 2019
- Trade Worries Not a Drag on US Business Investment - June 15, 2019