Political factors or oil exports from Iran and Venezuela, China and India are expected to become saviors
The threat of a decline in oil supply in Iran and Venezuela is particularly acute in the face of geopolitical tensions, economic worries and the return of the United States to sanctions against Iran. Both countries have been working hard to maintain oil exports to major destinations.
Iran’s oil exports to Europe have fallen
Since the lifting of the sanctions, the changes in Iran’s oil exports have also highlighted the timing of the changes. The blue bar represents the import volume of Eastern Europe, the red bar represents the import volume of southern Europe, and the green bar represents the import volume of northern Europe.
The UN's 2015 sanctions mean that Europe has not received any Iranian oil for the past three years. However, after the sanctions were lifted in early 2016, Iran’s total oil exports to Europe soared by nearly 20%, and last year and this year’s total increase reached 25%.
In Europe, the share of Iranian oil imported from southern Europe is the largest, with the main importers being Italy, France, Spain and Greece.
Although there are rumors in Europe that they will maintain close ties with Iran while maintaining oil imports, people will soon see that Iranian oil imports from Europe will decline due to US sanctions. Operation in the Iranian South Pars field will be reduced unless they receive special exemptions.
China and India may become beneficiary countries
During the previous sanctions, Iran’s oil delivery to Europe was hampered, while China and India were silently preparing to import Iranian oil. In the three years prior to 2015, the two major countries imported about 60% of Iran’s oil exports. After Iran was allowed to transport oil to other places, Iran’s oil imports fell.
Last year, the proportion of Iranian oil purchased by China and India fell below 50%, and it has only risen to over 50% so far in 2018. If Iran’s oil shipments to Europe really fall – this is very likely to happen, and China and India will be the main beneficiaries.
Like the United States, China and India are also major destinations for Venezuelan oil.
As Venezuela’s oil exports fell, the proportion of Venezuela’s oil purchased by the United States fell, but China’s purchases rose. The United States remains a major importer of Venezuelan oil, but China and India respectively import a quarter of Venezuela’s oil exports. Taken together, these three major countries have purchased nearly 90% of Venezuela's oil exports.
However, in recent months, as refinery utilization has decreased, mixing levels have increased, and competition for funds has intensified, the volume of Venezuela oil flowing into the US coast has shown an upward trend.
Due to quality problems, refiners such as Phillips 66 have stopped buying oil exported from Venezuela, while other companies such as Valero have increased their purchases. In April of this year, Valero's Gulf Coast refinery received the highest level of Venezuelan oil since March 2016, but the port of May delivery fell to four, namely Corpus Christi Port, Port Arthur, St. Charles Port and Texas City.
Despite the recent rebound in Venezuela's oil imports from the United States, this year's imports are 20% less than the average, less than 500,000 barrels per day, while the figures for 2016 and 2017 are 750,000 barrels per day, respectively. 600,000 barrels per day or more.