Iran exports first oil shipment to Europe since nuclear deal

Iran says it has exported its first crude oil shipment to Europe since it reached a landmark nuclear deal with world powers, the official IRNA news agency reported today on Sunday.

In order to retake its market share, Iran said in January that it will add to its production despite the drop in prices and should not be blamed for the further price drops.

He pointed to the plans pursued by the National Iranian Oil Company (NOIC) in order to equip the vessels used in oil terminals in the Persian Gulf commenting “accordingly, construction of eight new towing, logistic and support vessels have been placed on the agenda”.

Futures fell as much as 1.7 per cent in NY after surging 12 per cent on Friday. “Until there are significant cuts to output, the rally is not sustainable”.

Iranian Deputy Oil Minister Rokneddin Javadi announced on Sunday that his country has increased its oil production by 400,000 barrels per day after the lifting of global sanctions against the Islamic Republic, adding that an increase by another 200,000 barrels per day will take place. The contract gained US$3.23 to close at US$29.44 on Friday after dropping 19 per cent the previous six sessions.

The European benchmark crude was at a premium of US$1.42 to WTI for April. USA drillers idled rigs for an eighth week to the lowest level since January 2010, according to data from Baker Hughes Inc.

“While the announcement of Iran’s oil exports to Europe … is likely to have an impact on the markets, it is unlikely to be more than a knee-jerk reaction”, said Samir Safar-Aly, an associate at the law firm Simmons & Simmons. Total, Spanish refiner Compania Espanola de Petroleos and Russia’s Lukoil all booked cargoes of Iranian crude to sail from Kharg Island to European ports, according to shipping reports compiled by Bloomberg earlier this month.

He said that Iran’s exports, which now stand at 1.3 million barrels per day (bpd), will amount to 1.5 million bpd by mid-March, and to 2 million within a few months. Imports reached a record 33.2 million tons in December.