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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, 03 October 13
INDONESIA AUGUST COAL EXPORTS FALL 12.90 % FROM JULY TO 30.71 MIL MT
COALspot.com: Indonesia, the 15th largest economy in world, 4th largest coal producer in world and world's largest multi grade coal exporter ...
Thursday, 03 October 13
TOP FOUR U.S. COAL COMPANIES SUPPLIED MORE THAN HALF OF U.S. COAL PRODUCTION IN 2011 - EIA
In the past two years, more than half of U.S. coal production was attributable to the top four coal producers, the result of changes in regional pro ...
Thursday, 03 October 13
HANDY: PERIOD MARKET STAND IN GOOD POSITION - FEARNRESEARCH
Handy
Nickel ore and Bauxite was active last week but slowed down now due to Chinese holidays. Ships opened in North China fixed at US$ 11-13k leve ...
Wednesday, 02 October 13
DRY BULK MARKET IS STILL MAINTAINING ITS UPWARD DIRECTION
Chartering (Wet: Stable- / Dry: Firm+)
Despite the fact that rates for Capes didn't continue their crazy ride this past week, the Dry Bulk market ...
Wednesday, 02 October 13
HOW LONG WILL THIS LATEST CAPESIZE RALLY LAST? - TASOS PAPADOPOULOS
By Tasos Papadopoulos, SnP Broker, Intermodal
The surge in iron ore trade has translated into a massive boost in daily earnings for capes; with t ...
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Showing 4086 to 4090 news of total 6871 |
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- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Planning Commission, India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- The University of Queensland
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
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