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Thursday, 12 December 13
GREAT EXPECTATIONS SANCTIONED - EVA TZIMA
 News that sanctions on Iranian oil exports could be lifted sometime in the following months have shaken the markets recently. One of the world’s top oil suppliers historically and once OPEC’ s 2nd largest producer, Iran, has seen its exports squished since 2012, when both the U.S. and the European Union imposed additional sanctions against the country’s oil exports.
The sanctions that were imposed on the basis that Iran’s nuclear programme included enrichment of uranium, which if surpasses certain levels of purity can be used to develop nuclear weapons, affected extensively Iran’s economy. Following U.S.’s Comprehensive Iran Sanctions, Accountability, and Divestment Act (CIS ADA), a law passed in the summer of 2010 by the Congress, the E.U. also placed significant restrictions on foreign trade, financial services, energy sectors and technologies related to Iran. Additionally, the provision of insurance by firms incorporated in any E.U. member country, to Iranian-owned companies, was banned. With oil and gas production accounting for almost half of the local government’s income, the country’s current account surplus for 2012 has dropped more than 50% compared to 2011, while at the same time Iranian assets and funds were blocked due to the international sanctions.
With over 5% of the global sea borne exports coming from Iran up until 2012 and with domestic reserves placing the country at number four on the world’s largest oil reserves list, the knee jerk reaction was that lifting of these sanctions was great news for the tanker sector. Right when freight rates for the crude oil carriers have started catching a significant break, such development would come as the cherry on the top of a strengthening market and a possible recovery within 2014. As the noise has started to settle down though, it has become more evident that the outcome of all this is still very uncertain both for the timeframe during which sanctions will be lifted, as well as for the sort and scale of impact this could have on the fate of crude carriers.
The effects of Iran becoming a no-trade zone have been in tensely felt in the shipping industry, as the total restrictions for oil and gas exports have hurt seaborne trade in the region and elsewhere. On the one hand, European Union member states accounted for around 20% of Iran’s oil exports prior to the 2012 sanctions, while at the same time indirect restrictions were placed even for big importing countries of Iranian oil who didn’t impose sanctions themselves. In fact, as the U.S. targeted the country’s revenue from oil exports, it committed to cut off from the U.S. banking system any international financial institution that engaged into oil related transactions with Iran’ s central bank. That led the top importers of Iranian oil, like China, India, Japan and S. Korea, to reduce the number of Iranian crude in to their countries. This weighed further down on seaborne traded volumes and on top of that, any ship insurance cover from the sanction imposing countries was also rendered impossible; So, remove the sanctions and you get a healthier market back. Financial institutions are allowed to back up Iran related transactions, P&I clubs will start insuring cargoes and ships involved in the trade, Iranian funds t hat have been frozen all these years will be unblocked permitting for a significant liquidity boost in the oil market and crude exports both in the Med and Asia region will reach pre-2012 volumes again or even surpass them especially since Far East appetite for oil has been firing up again recently; Picture perfect for sure but don’t pop up the champagne just yet…
The reality is that the recent deal reached in Geneva will for now only allow “limited, targeted and reversible relief” from the existing sanctions. From Iran’s side, one of the main commitments involves halting enrichment of uranium over 5%. In return, world powers will put an end to specific sanctions involving the trade of petrochemicals, gold and the automotive sector, while they will also allow for $4.2bn of oil related funds to be transferred back to the country. This means that there is currently no commitment for oil related sanctions to be lifted in the near future and this is certainly a massive political hot potato for any world leader who decides to touch it, and one that cannot be easily reversed if a no sanctions path is carved. Businesses involved in sectors previously or currently affected by the sanctions will not jump to do business with Iran either. I would think that they will choose to wait for now and get involved only after a long period of time ha s passed, avoiding any back and forth on the sanction policy, as they wouldn’t want to risk seeing themselves or their funds being tainted in the process.
But irrespective of the developments surrounding the sanctions, as far as the trade of oil is concerned, the fact is that it has been the demand side of the trade driving the volumes rather than the supply. While the supply of crude coming from Iran has hit employment of tankers, in reality, the sector hasn’t suffered that long due to scarcity of cargoes but rather because of continuous subdued demand for the commodity, on the back of slowing down economies and increase in the price of oil itself. Nonetheless, the most worrying aspect in my opinion is the great expectations removal of sanctions can create in the market. The false sense of a possible demand spike that might o r might not happen, can lead to over optimistic expectations by owners and boost ordering in segments like that of VLs, the order book of which has been relatively healthy up until recently, leading to another vicious cycle of tonnage oversupply. Hopefully not.
Compiled by:
Intermodal Research & Valuations | research@intermodal.gr
Analysts:
Mr. George Lazaridis | g.lazaridis@intermodal.gr
Ms. Eva Tzima | e.tzima@intermodal.gr
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Thursday, 07 November 13
HANDY : INDO/CHINA ROUNDS ARE SEEING BIDS AT AROUND $16K
Handy
In the Atlantic we have seen more activity this week with several fixtures being concluded at firm rates. USG/Feast been reported at 30k and ...
Wednesday, 06 November 13
THE BIGGER SIZE SEGMENTS LOST GROUND WHILE SUPRAS AND HANDIES HELD ON TO THEIR GAINS - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable- )
A mirror image of the week prior for the Dry Bulk market, as once more the bigger size segments los ...
Wednesday, 06 November 13
WILL NEW ORDERS DRIVE THE MARKET DOWN AGAIN ONCE DELIVERIES COMMENCE
"While there are many concerns on whether the new orders will drive the market down again once deliveries commence, the second half of 2013 has ...
Tuesday, 05 November 13
AUSTRALIA'S NEWCASTLE PORT SEES DROP IN COAL EXPORTS W-W
COALspot.com: In the week ended November 4, Power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.77 m ...
Monday, 04 November 13
API 8 CFR S.CHINA COAL SWAP FOR Q3' 2014 DELIVERY CLOSED 3.65% HIGHER COMPARED TO Q1' 2014 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.24 percept W-W on Friday 1 November 2013. The CFR South China Co ...
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Showing 4026 to 4030 news of total 6871 |
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- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- White Energy Company Limited
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
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