Even massive inspections not to prevent the sale of Iran’s oil: Energy expert

TEHRAN MAY 11 (MNA) -Visiting Research Scholar in the CESP Omid Shokri believes that even with massive inspections the US will not be able to drive Iran’s oil export to zero.

To drive Iran’s oil export to zero, the Trump administration said that it will no longer exempt any countries from US sanctions if they continue to buy Iranian oil, stepping up pressure on Iran in a move that primarily affects the five remaining major importers: China and India and US treaty allies Japan, South Korea, Turkey.

To shed more light on the issue we dissussed it with Omid Shokri Kalehsar a Washington-based Senior Energy Security Analyst.

Here is the full text of our interview with him:

Saudi Arabia and the UAE have announced they will compensate for Iranian oil. Is this possible technically?

Supply and demand is an important factor in the international oil market. The oil market needs increased supply from major OPEC members and non-members such as Russia. It seems that Saudi, the UAE and Iraq with Russia must produce more oil to overcome the shortage of Iranian oil in the oil market. At present major importers of Iranian oil are looking to find an alternative to Iranian oil because the US did not extend the waiver for Iran’s major oil buyers. India and South Korea are importing more oil from the US and also imported more US LNG, refineries from these both countries are adapting themselves to US oil, they previously imported Iranian oil and are now ready to import US oil.  Some analysts believe that the Saudis will be faced with the major problem of increasing their oil output by as much as a million barrels; Saudi Arabia’s oil consumption is rising in the warm months due to increased cooling applications and oil consumption rises from 400 to 500,000 bpd.

It is claimed that the other barrier which Saudi Arabia faces in increasing its crude exports is that the government have invested heavily in their refineries and oil products exports over the past years. A unilateral increase in oil output beyond the quotas could impose a requirement for other OPEC members and even eliminate the agreement between OPEC and 10 OPEC non-member countries.

It will possible for Saudi to increase its crude production in the two months of May and June. Saudi Arabia said the country’s oil production in the first quarter of this year would be lower than its country’s quota, which would allow the country to increase production in those two months. It should be recalled that calculating the compliance of OPEC member states with their oil production quotas is carried out over a six-month period, and the average monthly production of these countries in this six-month period is the basis for judging their compliance with their quotas.

In this way, Saudi Arabia could offset Iranian oil exports from markets by boosting its oil production over the next two months. The decision on the quota for the second six months of this year (July to December) will be taken at the OPEC Ministerial Meeting in Vienna, held in June. Thus, eliminating Iranian oil does not necessarily increase oil prices in the global markets. Some Iranian officials have also confirmed this.

In respect with the United Arab Emirates, which has been proposed as one of the alternatives to Iran’s oil market, the country has a production capacity of 3,300,000 barrels per day; its production in 2002 was 2.56 million barrels per day and in 2018 were 3 million and 34 thousand barrels a day. However, according to the latest OPEC announcement, the UAE’s oil production in March 2019 amounted to about 3 million and 59 thousand barrels a day. One million barrels will be provided to domestic refineries, and the rest will also be shipped to the export market.

At present some oil producers such as Libya and Venezuela face tensions and political unrest. Currently, aside from Saudi Arabia and the United Arab Emirates, OPEC has no spare capacity. Of course, the commitment to quotas is an important message for the oil market. On the other hand, OPEC or the Consumers’ Union is also seriously concerned. If major consumers such as China, India or Turkey form an oil consumer organization, America will not be able to cope with them. Most of OPEC’s Middle Eastern countries have focused on Asian markets because the European market has no horizons and the future of the oil market is developing in Asia. In other words, in the current century, they are the largest producers of Asian oil.

The US is making efforts to drive the export of Iranian oil to zero. Is it possible? If not, why?

Even a massive inspection will not prevent the sale of quantities of oil. During the Iraqi oil sanctions , despite the international cooperation in this regard, the country was still able to smuggle some of its oil in various ways, including through neighboring countries. Based on this, the US government largely relied on buyer cooperation and fears of a second-round sanction to curb Iran’s oil exports. In terms of the oil market, despite the promise of some exporting countries to compensate for any shortages in the market and OPEC’s commitment to maintaining price stability in the oil market, full compensation for Iranian oil exports to its technical specifications is not urgent, and given the special discounts that the Iran gives to some importers, , small companies who are less concerned about cutting US financial and trading facilities will continue to buy oil shipments.

Some of Iran’s oil production is being shipped to China for storage, and part of it is also transported to tankers for informal sales. It seems that Iran could ship 300 to 650 thousand barrels of oil a day, which will not be sold every day. Selling Iranian oil on the grey market is the only way to keep some Iranian share in the oil market.  Iran must sell its oil at a low price to find costumers for its oil, while another problem is how to get money from costumers? Another way is for Iranian officials is to sell Iranian oil in the name of another (third) country.

The US is forcing Turkey to stop buying oil from Iran and replace Saudi and Emeriti oil instead of Iranian oil. What are the advantages of Iranian oil for Turkey?

The main question for oil traders and political analysts is how much America wants to test these relationships by crippling the Iranian economy. According to the latest official figures available in January, Iran provided more than 12% of Turkey’s oil imports. Iraq held 24 percent of the main supply, and Russia provided 15 percent of Turkey’s imported oil. Turkey imported only diesel from the UAE in January, and now Iran is the third largest supplier of crude oil for Turkey. “Iran’s oil is not cheap, but there is a major difference in comparison to the prices of Saudi Arabia and the United Arab Emirates,” Turkish Foreign Minister Mevlut Çavuşoğlu said in Ankara.

Turkey has always defended its commercial ties with its eastern neighbors and considers it a strategic requirement. Iran’s oil could be another source of diplomatic controversy between Ankara and Washington, when relations between them are tense due to Turkey’s emphasis on purchasing a missile defense system from Russia. Turkey, after some time, will be able to find alternative for Iranian oil; although Turkey prefers to have energy relations with Iran, it seems that Turkey will decrease oil imports from Iran and they may drop to zero in the medium term.

Interview by Payman Yazdani


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Oil may extend rally


Opec cuts, US sanctions will continue to impact crude supply in Q2

Oil prices, which gained 30 per cent on average in the first quarter of 2019, are expected to continue the rally in the second quarter and likely to trade mostly around $70 a barrel, according to industry analysts.

The first-quarter gain was the biggest quarterly rise in a decade, driven by the US sanctions on Iran and Venezuela as well as cuts by Opec and non-Opec members that were implemented in early January this year.

On Friday, the Brent rose 48 cents to settle at $67.59 a barrel while US West Texas Intermediate (WTI) futures rose 84 cents, or 1.42 per cent, to $60.14.

The oil price in the second quarter is expected to trade between $64 per barrel to $70 a barrel compared to $60 to $65 per barrel range forecast for the first quarter. Industry executives and analysts have put $67.4 a barrel median range for second quarter and as high as $80.

Oman’s Energy Minister Mohammed bin Hamad Al Rumhy on Saturday emphasised that the Sultante will remain committed to Opec agreement until the end of 2019. He predicted crude prices to trade in the range of $65 and $75 a barrel until the end of 2019.

With oil rig count falling and production remaining stagnate last week in the US while the Opec and non-Opec countries also reluctant to make up for the lost volume, the oil prices will rally further in the coming months. The other factors which will influence the oil price upward will be the US sanctions on Iran and Washington’s consistent pressure on traders to reduce their exposure to Venezuela.

“Oil price trend continued to remain upward during March 2019, showing consistent gains since the start of the year and closing little short of the $70 a barrel mark. However, prices are yet to see the peaks seen during October 2018,” said Faisal Hasan, head of investment research at Kamco. 

World oil demand is projected to rise from 99.02 million barrels per day in Q1 2019 to 99.21 million barrels per day in Q2 2019, keeping the oil prices steadily on the upward trend during second-quarter 2019.

Opec and Russia had cut oil production by 1.2 million barrels per day from January 2019 for an initial six months period, which was one of the main drivers for the surge in prices. Opec members agreed to cut 0.8 million while Russia had 0.4 million bpd cut.

Oil producers are planning to hold an ordinary meeting again in Vienna on June 25 and an extraordinary meeting on April 17-18. Reports said Saudi Arabia was trying to convince Russia to stay much longer in the pact of lower oil production, and Moscow may agree only to a three-month extension.

“Saudi Arabia, if necessary, will further reduce its production to balance oil supply and demand. Opec’s next meeting will be held by April 2019 and if Opec members and Russia agree on reduction oil production it can be expected that oil prices will increase,” said Omid Shokri Kalehsar, a Washington-based senior energy security analyst and visiting research scholar in the Schar, School of Policy and Government at George Mason University.

Kalehsar noted that the US is expected to extend waivers from Iran’s sanctions to several countries to prevent a sharp rise in oil prices. “If there is no major political tension in the oil producing region, a balance can be seen between and supply and demand by Q2 and there will be no major change in oil prices,” he said.

Meanwhile, reports said that the US has instructed oil trading houses and refiners to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published US sanctions.

“With US sanctions taking Iranian and Venezuelan oil off the market, at the same time Opec and non-Opec producers want to see higher prices and are currently reluctant to make up for any lost volume,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

In addition, the US energy firms last week reduced the number of oil rigs operating to their lowest in nearly a year, cutting the most rigs in a quarter in three years.

According to Baker Hughes, the total number of active oil drilling rigs fell by 8 to 816. Canada’s total oil and gas rig count fell by 17 and is now 88, which is 46 fewer rigs than this time last year.

Waheed Abbas/DubaiFiled on March 30, 2019 ,
https://www.khaleejtimes.com

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Sanctions Against Iran and Venezuela Made US Leader in Oil Production – Expert

According to JODI [Joint Organisations Data Initiative], for eleven months now the United States has been the world leader in terms of monthly oil production. According to the organisation, in January 2019, Saudi Arabia’s production amounted to 10.243 million barrels per day.

At the same time, US oil production in January was 11.881 million barrels a day compared to 11.849 million barrels per day in December 2018.

Speaking to Sputnik, Omid Shokri Kalehsar, a Washington-based Iranian independent energy security expert, noted that oil sanctions against Iran and Venezuela will allow the US to appropriate these countries’ share of the world market:

“As a result of the shale revolution, the United States, who had previously imported oil, was able to become self-sustaining in the field of energy, as well as to become one of the largest gas and LNG [liquefied natural gas] suppliers both to neighbouring countries and to its allies, primarily in Europe. The US uses energy exports as a driver in their relations with other countries, and together with the use of such a tool as sanctions, this factor has become decisive in shaping US foreign policy”, the expert said.

Mr Kalehsar also noted that the US has repeatedly imposed sanctions against Iran with the most recent ones being imposed on 4 November 2018 and leading to a significant reduction in Iranian exports.

“If the US continues their sanctions policy and if the exemption from sanctions granted to eight countries that import Iranian oil is not extended in May, Iran’s oil exports are likely to decline even more”, the energy security expert told Sputnik.

Speaking about the policy’s objectives, Omid Shukri Kalehsar said that the United States has become one of the largest oil producers, and oil sanctions against Iran and Venezuela will allow them to appropriate these countries’ share of the world market.

According to the expert, this applies not only to the United States, but also to other oil-producing countries, including members and non-members of OPEC.

“If Iran and Venezuela keep oil production and exports at the same level, no one can take their place; therefore, sanctions against Iran and Venezuela benefit not only the United States, but also OPEC”, Kalehsar concluded.

The views expressed in this article are solely those of Omid Shokri Kalehsar and do not necessarily reflect the official position of Sputnik.
https://sputniknews.com

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Iran is losing regional and world gas market

TEHRAN, Mar. 09 (MNA) – Touching upon the necessity of Iran’s more active foreign and energy diplomacy to keep and increase its share in regional and world gas market, Omid Shokri believes Iran is even losing Turkey’s gas market.

In near future, gas refineries of phases 13, 22, and 24 of South Pars will be inaugurated officially. This means Iran’s greater share of gas field against its rival Qatar, but situation of Iranian gas exports is not very good. To know more about the issue we reached out to Washington-based Senior Energy Security Analyst Omid Shokri Kalehsar. He is currently serving as a Visiting Research Scholar in the Schar, School of Policy and Government at George Mason University

.

Why Iran has not been successful in exporting gas despite its success in gas production so that the project of exporting Iranian gas to Pakistan and Oman have not been fruitful after many years?

Exporting natural gas to neighbors is Iran’s priority.  According to strategy of Ministry of Oil, after all phases of South Pars will be online, Iran would be able to exports about 200 mcm natural gas to neighbors.  Iran has some natural gas projects. Iran-Pakistan pipeline will be one of Iran natural gas projects.  Iran completed required infrastructure by 2014 to deliver natural gas to Iran-Pakistan border. But Pakistan due to financial problems and capabilities did not build pipeline to Iran-Pakistan border. Saudi is trying play important energy diplomacy in Pakistan.  And during Bin Salman’s visit to Pakistan they signed some agreements in energy sector and it seems that it will not be easy for Iran to export natural gas to Pakistan in short-term.

Iran has also planned to deliver natural gas to Oman by 2020, but by March 2019, there is going to be a major development in Iran-Oman pipeline. According to the agreement Iran must export 1.5 bcm natural gas to Oman. Iran also is interested to use Oman LNG facilities to produce LNG and export LNG. By October 2018, Oman Ministry of Oil set a tender to choose a company for construction pipeline in Oman territory.

Only %20 of Iran’s gas export pipeline capacity to Basra, Iraq is active. Why Iran has not been able to utilize the full capacity of the pipeline?

The major problem is due to sanctions. Iraq can’t pay for natural gas which imported from Iran. I think there is no major problem in natural gas production. During Summer Iran export more natural gas rather than Winter. During winter domestic consumption is high and Ministry of Oil has to transit more natural gas to domestic pipeline network.  It can be expected by coming months’ capacity of natural gas export to Iraq to be increased. Domestic consumption in Iran is too high. Iran needs to use energy efficiency in all sectors to increase domestic consumption. At present majority of natural gas agreements are long term (20 or 25 years) and it is not clear why Iran-Iraq natural gas pipeline period is just for six year. It possible for Iran to get oil and gas debt with Iraq currency Dinar.

Only 5 to 6 years remain to termination of the contract for the sale of Iranian gas to Turkey and Iraq, and on the other hand, Iran has not been able to find new markets for its gas. What should Iran do for exporting regarding to the increase of gas production?

Exporting natural gas to EU market is Iran second priority.  Natural gas export to Europe requires a much longer pipeline than the Persian Gulf states. As you know, the only logical route to export gas from Iran to Europe is Turkey, although in the past, several transit routes were considered, including Iraq, Syria, the Islamic pipeline, Armenia and Georgia, but at present, Turkey is the right option for Iran to export gas exports to Europe.

The pipeline needed to transport gas from Assalouyeh to the Turkish border is about 2,000 kilometers. Exporting gas from Turkey to the first European country also requires at least another 2,000 kilometers of pipeline, which is much longer than the 200-kilometer pipeline to the Persian Gulf states. Turkey, on the other hand, is not willing to transit Iran’s gas because of its adoptive policies. It wants to be the gas hub itself, the recipient and distributor of gas, which is by no means accepted by Iran. In addition to the logistical and geopolitical issues associated with Iran’s gas exports to Europe, there is also a price dispute.

During past year Iran and Turkey hold a round of negotiations to extend Iran-Turkey natural gas pipeline period. But there is no major progress in negotiations. Iran asked Turkey to import more natural gas and Turkey asked Iran to give more discount in natural gas price. Turkey is importing natural gas from TANAP project from Azerbaijan and by 2019 and Turkey will begin to import more natural gas from Russia via Turk Stream project. Turkey also increase LNG import from Qatar and doubled importing LNG from US. Turkey also made huge investment in renewable energy. It means that Iran natural gas in Turkey energy market is losing its importance. Iran needs more active foreign policy and energy diplomacy to keep its share in regional market and also increase its share.

What will be the possible effect of completion of the North Stream II project on the future of Iranian gas exports?

In EU market there is major competition between Russia, Qatar, US and Australia. Russia is using different pricing system and export policy for every country in EU market to keep and increase its share in EU market. US is against EU’s more dependency on Gazprom. Last December US asked EU members to import more LNG from Qatar instead of importing natural gas from Russia. At present Russia has two major projects to deliver natural gas to EU market. Turk Stream and North Stream II. US is against North Stream II.

US due to shale gas revolution is trying to export more natural gas and LNG to neighbors and its allies. Germany needs Russia natural gas and has welcomed North Stream II project. All developments show that Iran will face major challenges to be a key player in natural gas market in both regional and world natural gas markets and also in short term or midterm it will be hard to Iran to be natural gas exporter to EU.

Due to US sanctions no major foreign energy firms are interested to invest in Iran energy sector.  In my opinion the major problem in Iran energy sector is that to attract foreign investment you need a legal framework, an efficient and fast decision process and political stability (especially in the international context). These variables are far from being achieved as we speak,”.

Mehrnews.com

Interview by Payman Yazdani

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US Wants Europe to Use Qatar Gas Instead of Russian Supplies

The US wants European countries to find other gas suppliers to Russia, with resource-rich Qatar as a possible alternative.

Deputy US Energy Secretary Dan Brouillette told Reuters that Washington was in talks with Doha to supply gas to Europe, and particularly countries that are reliant on Russian gas.

Russian gas accounts for around 60 percent of Berlin’s gas imports, with the Nord Stream 2 pipeline set to double Moscow’s export capacity to Germany.
US President Donald Trump has warned Germany that it would be “captive” to Russia if it relied on it as a gas supplier and urged Berlin to halt work on the Nord Stream 2 pipeline.

The move could see German companies face US sanctions.

Brouillette said he has held talks Qatar’s Minister of State for Energy Affairs Saad al-Kaabi about whether Doha could be an alternative gas supplies to Europe.

“We are talking to Minister Kaabi here about other markets, specifically Europe, to the extent that we can talk to the Qataris about supplying European markets with natural gas,” he said in an interview.
“They are very much interested in that and so are we – it’s very connected to deliberations with others we have around Nord Stream 2.”

He added that Qatar could help diversify the gas market in Europe, particularly with Doha’s investments in LNG export facilities.

“It is good for the national security of Europe. Cheap gas comes at a high price of freedom,” said Brouillette.

Last September, Qatar said it would invest $11.6 billion in Germany over the next five years including in a LNG terminal.

Omid Shokri Kalehsar, a Washington-based senior energy security analyst, told The New Arab that Washington has been encouraging European countries to diversify Russian-dominated energy supplies, with Qatar and the US as possible alternative suppliers.

“It is in the US’ interest allow Qatar to export to specific markets,” said Kalehsar, saying Doha’s supplies play a key role in Washington’s strategy of providing balance in the market.

“Increasing LNG supplies is the best way to reduce [Europe’s] dependency on Russian natural gas…. Qatar is a major LNG provider and is trying to increase its share in the market. Russia is trying to keep its monopoly in Europe – with energy – and has used different pricing strategies to do this.”

Russia has sold a stake of its shares in Rosneft to Qatar, as Doha battles a blockade from a Saudi-led coalition.
Turkey is also boosting its relationship with Russia with the construction of the TurkStream pipelines.

https://www.alaraby.co.uk

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Iran to Export 1mn bdp of Oil Despite US Sanctions

Qatar will withdraw from the Organization of the Petroleum Exporting Countries (OPEC), the Persian Gulf nation’s Energy Minister Saad Sherida al-Kaabi announced.

The decision to quit the bloc of 15 oil-producing countries that account for a significant percentage of the world’s oil production was confirmed by Qatar Petroleum, the state oil company, last Monday.

Following is an interview with Omid Shokri Kalehsar is a Istanbul based Senior Energy Security and Policy Analyst on the issue:

What are the reasons behind Qatar’s decision to withdraw from OPEC? Is it politically and economically right decision?

It seems that Qatar is interested to be more active in LNG market and keeps its place as world’s first LNG producer and exporter. But it is possible for Qatar to export more oil if Qatar withdraw from OPEC. It should be noted that there is a major challenge between Qatar and Saudi Arabia as OPEC major producers and actor. It is possible for Iran’s private sector to buy Iran crude oil from Energy Exchange and sell it to Qatar energy firms and Qatar firms after Qatar withdrawal from OPEC sell it oil to regional and world market.
Is there any relation between Qatar’s decision and the Saudi policy in the organization?

Some analysts believe that Qatar decision to withdraw from OPEC is reaction to Saudi Policy in OPEC. Qatar is against Saudi Policy in the OPEC, Saudi Arabia after Khashoggi was under pressure.  It should be noted that Qatar-Saudi relations faced major challenge after a Saudi-led coalition imposed blockade Qatar.
Any relation between Trump’s anti-OPEC policies and Doha decision?

 Stability in world oil and low price in oil market is in favor of oil consumers and US. US is against any

country or organization which decided to increase oil production or increase oil price. Trump administration can be expected to continue its policy toward OPEC and will ask OPEC member states to produce more oil to keep oil price down.

How do you see the future of the 60 years old organization?

Major OPEC oil producers must solve problems if they want OPEC to be one of the key factor in world oil market. Every country which has more production has a power in OPEC.
Cooperation and coordination between major oil producers and non-major oil producers is required. If OPEC members need to continue their role in world oil market, they require cooperation between themselves. Without cooperation and mutual understanding between all OPEC members, there is no clear future for OPEC and this organization may face serious challenges in the future.

At the present moment which Iran is under US and its regional allies’ pressure such as Saudi Arabia and UAE to cut Iran’s oil export to zero, will Doha withdrawal from OPEC affect the US goals toward Iran?

As I mentioned before in my interviews and papers it is not easy to drop Iran oil export to zero. Iran during sanction era will be able to export average 1000000 bpd and 300000 bpd condensate bpd.  Iran oil export’s drop is in favor of rest major oil exporters and all major exporters are satisfied with new sanctions imposed against Iran oil exports.

How will be possible reaction of Russia and China to Qatar’s withdraw? Will this decision affect China’s One road-One belt project? 

Russia has a plan to be a key player in LNG market. Russia is careful about all major oil and gas producers, Russia wants them to lose their share in world energy market and plans to increase its own share. China as energy costumer has its own strategy toward energy producer countries in the Middle East such as Qatar. China in promotion of its “Going out Strategy” encourages energy companies to invest in Qatar’s energy sector mainly in natural gas fields. Chinese officials have repeatedly stated that China’s common goal from One road One Belt project is to create dialogue, help to bring peace and stability in the Middle East, link East and West Asia and joint development, eliminate obstacles and biases. Arab Countries and Qatar has special position in this project. According to Wang Yi, Foreign Minister of China, Arab countries cooperation in One Road One Belt will bring Peace in the Middle East. China is interested to keep stability in the region to import oil and gas freely from the region. energy security is key factor in China foreign policy. Last September PetroChina inked its biggest Qatar LNG deal as U.S. Trade at Risk and it seems that China will increase its investment in Qatar energy sector to promote Qatari cooperation in One Road One Belt project.

Omid Shokri Kalehsar is a Senior Energy Security and Policy Analyst, Istanbul.

https://en.mehrnews.com

Interview by payman Yazdani

News Code 140293
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Driving Iranian oil export to zero in short term not easy: Energy expert

TEHRAN, Oct. 27 (MNA) –Touching upon the importance of oil market stability for the US, senior energy expert Omid Shokri says it is not easy to drive Iran’s oil export to zero in short term.

Following the brutal killing of Saudi Journalist at the Saudi consulate in Istanbul, There have been lots of tensions between Saudi rulers and their western allies particularly the US.

The US President Donald Trump has had different contradictory and weak stances towards the scandal. Despite threatening serious punishments against killers of the Saudi journalist at the same time Trump calls the Saudi regime as an important ally for confronting Iran.

The issue was discussed with Omid Shokri Kalehsar, a senior senior energy security and policy analyst in Washington.

Referring to the significance of oil market stability he said, “Stability in world oil market is in favor of US. Any increase in oil market directly affect energy security in the US. US planning to drop Iran oil export to zero but in short term it will not be easy to drop Iran oil export. At long term with sufficient oil supply by major oil exporter Iran’s role in world oil market may decrease, Iran needs to keep its share in regional and world oil market. Iran needs to play active energy diplomacy if interested to keep and increase its share in regional and world oil market. It can be seen that Iran’s oil export will decrease more than %50 in contrast to post nuclear agreement.”

Asked about the possible effect of the recent tensions between Riyadh and Washington over the brutal murder of Saudi journalist Jamal Khashoggi at Saudi consulate in Istanbul, Shokri said, “Current political tensions between Iran and Saudi Arabia, gives an opportunity to Saudi Arabia to export more oil to reduce Iran’s share in world market.

Current tension between US and Saudi Arabia, over Khashoggi hold a potential to affect world oil market but stability in oil market is US priority and also US trying to drop Iran oil export to zero. As mentioned before it will be hard to US to drop Iran oil export to zero. I think US and Saudi due to mutual interest are interested to manage any tension with aimed of decreasing Iran’s role in world oil market. Saudi has promised US to buy weapons from US and value of weapon agreements is above $100 billion. This agreement is very important for US economy and creation of job opportunities for US workers.”

Interview by Payman Yazdani

 

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The fate of Iran’s energy development plans under US pressure

Tehran, Iran, November 18

By Mehdi Sepahvand – Trend:

A recent expression of doubt by Patrick Pouyanné, the chief executive officer of France’s energy giant Total, whether to carry out cooperation with Iran has strengthened worries over the fate of Iran’s energy development projects.

 

Omid Shokri, a Washington-based energy analyst, told Trend November 18 that “Total or any other oil and gas company is interested to have good relations with US,” adding, it is possible for Total to withdraw from South Pars field.

 

Total’s chief executive officer last week said under political pressure, his company is liable to leave the $4.8 billion deal with Iran. “If we cannot do that for legal reasons, because of [a] change of [the] regime of sanctions, then we have to revisit it,” he said.

 

Total last week increased its US presence with the purchase of a portfolio of liquefied natural gas assets from Engie (ENGIY), including the company’s stake in the Cameron LNG project in Louisiana, one of the first new gas export terminals in North America.

 

Sealed a few months ago, the deal with Total over the development of South Pars gas field used to be vied by Iran as an icebreaker and itself a discouragement for new sanctions on Iran.

However, last month US President Donald Trump unveiled a tough and comprehensive new policy towards Iran. He accused Tehran of violating the 2015 nuclear accord (which had paved the way for removal of sanctions) and announced that he would no longer certify that the lifting of sanctions was in US interests.

 

Shokri believes that major to-be partners of Iran’s oil and gas companies are waiting for US Congress decision about Iran and nuclear agreement.

 

This is while Iran used to cherish the nuclear deal as a means to open way for the development of its oil and gas industries, which had been kept outdated by years-long sanctions.

Iran’s economy is heavily oil-dependent. In the early 2010s, sanctions efficiently stifled the country’s oil revenues as its exports dropped from 2.3 mbpd to 1 mbpd.

 

Iran’s oil, gas, and petrochemical infrastructure are not by far as efficient as they could. Many of the country’s oil fields are in the second half of their lives and need restoration or else they lose profitability.

https://en.trend.az/business/economy/2823946.html

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What connects Turkey and Iran? – A look from Washington – EXCLUSIVE

Omid Shokri Kaleshar

Senior Energy Security Analyst, Washington, specifically for Eurasia Diary

Yesterday Turkish President Recep Erdogan negotiated on the regional crisis with the Iranian President Hassan Ruhani and, in particular, a referendum on Syria and Iraq with Iranian officials. Turkey suffered more from the Syrian crisis and presented about 3 million Syrian refugees living there. By October 2017, Turkey donated about $ 30 million to Syrian refugees. Iran and Turkey together with Russia have the potential to solve the Syrian problem, but they also need to cooperate with the US on this issue.

The Iranian and Iraqi forces conducted trainings near the border with the autonomous region of Kurdistan in Iraq, especially after tension raised after the referendum on independence. Last week, the head of the Turkish military headquarters, General Hulusi Akar, visited Tehran for talks with the leading military and political figures of Iran, who are expected to deal with border security and the fight against terrorism, along with regional problems.

 

Turkey and Iran agreed to strengthen military ties after referendum in Iraqi Kurdistan, where more than 90% of population voted for independence. Iran with Iraq and Turkey can expand military cooperation and conduct military exercises near the borders of Iraq in order to effectively counter regional instability.

There is a Kurdish minority lives in both of countries and they want to create a Kurdish state that directly affects national security, and it is expected that they will apply the same policy in this matter. Energy-intensive Turkey imports large volumes of natural gas from Iran. Both countries are seeking to enhance banking and trade ties in order to triple bilateral trade to $ 30 billion a year in the coming years after the lifting of international sanctions against Tehran.

The preferential trade agreement between Turkey and Iran turned out to be a huge disappointment during the first two years, when bilateral trade lagged behind the $ 35 billion target that the deal was supposed to reach. The agreement, which entered into force on January 1, 2015, aimed at reducing tariffs for about 300 products in order to triple the volume of trade. The results, however, were far from ideal, not even reaching one-third of the goal. While the Iranian market caused the appetite of the world’s trading giants, Turkey showed itself in a very favorable position, being the closest neighbor with already existing tariffs. Nevertheless, there were many disappointments. Despite the lifting of sanctions, Turkish-Iranian trade in 2016 was 100 million fewer than in the previous year, which meant the collapse of the preferential trade deal in just two years.

 

Starting from the first year, the deal resulted in an unexpected result: instead of growth, the volume of trade between the two neighbors declined. Turkish-Iranian trade amounted to 9.76 billion dollars at the end of 2015 dollars. Not only at 25 billion dollars smaller than the target, but also by $ 4 billion below the level of 2014 in the amount of 13.7 billion dollars. In 2016, Turkey’s exports to Iran amounted to 4.97 billion dollars. compared with 3.66 billion dollars. in the previous year, while imports from Iran, including natural gas, amounted to 4.7 billion dollars., compared with 6.1 billion dollars. in 2015.

Turkey had a positive balance of trade with Iran for the first time in 16 years. Even if this is a small surplus (only about $ 270 million), the fact that the balance is changing in favor of Turkey is a noteworthy development, the result of a steady trend over the past four years. Considering the instability in Iraq and the referendum in Iraqi Kurdistan, Iran has the potential to supply oil and gas to Turkey.

Iran and Turkey should prepare a joint plan, which take into account their national interests regard to the regional crisis, especially in Iraq and Syria. Instability in the region does not benefit the regional states, and it should be noted that both countries are neighbors. The regional crisis requires regional cooperation, and also with the main actors in the region, no country in itself has the capacity to address the regional crisis.

In summary, Iran and Turkey have their own interests in the region, and in some circumstances there is a clash of interests, but by 2017, after the Syrian crisis and after the referendum in Iraqi Kurdistan, both countries, cooperating with Iraq on the issue of Iraqi Kurdistan, and with Russia, and with the United States in the Syrian crisis, should play a more active role. Instability and chaos in these regions directly affect the stability and security of Iran and Turkey. Regional cooperation and large entities in the region are needed to solve the regional crisis.

http://ednews.net/en/news/interview/196428-what-connects-turkey-and-iran

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Steps Ahead: Russia’s Gazprom Outfoots Europe, Mulls LNG Plant in Iran

Russia’s Gazprom is going to sign a contract with the National Iranian Oil Company (NIOC) to build a liquefied gas plant in the Islamic Republic. The facility will use natural gas from Iran’s South Pars and the end product will be exported to India, Cambodia and Laos.

The two sides are likely to finalize the contract at the St. Petersburg International Economic Forumopening today, Iran Daily reported, citing Fars News Agency.
In an interview with Sputnik, independent Iranian energy expert Omid Shokri Kalehsar said that by pitching such a contract to the Iranians, Gazprom had outpaced its European partners as Iran was only panning to hold tenders for the building of LNG-producing mini-plants.

“The ground for the launch of a number of major bilateral projects, including in the energy sector, was prepared when President Hassan Rouhani visited Moscow in March. European and Russian companies waited for the end of the presidential elections in Iran to thrash out a deal, butr Gazprom got ahead of them all negotiating with our Energy Ministry and NIOC the construction of an LNG plant,” Kalehsar told Sputnik Persian.

He added that with a new government now in place in Tehran, Russia was likely to bolster its position in the Iranian gas sector and that the signature of a pertinent agreement would come as a big step forward in this direction.

Southeast Asia tops the list of Iran’s trading partners and liquefied gas could be a welcome addition to the Iranian exports to the region.

“In view of the growing consumption of liquefied natural gas in a populous country like India, the construction of an LNG plant is highly justified and Russian companies could be of great help here. We could start by setting up a joint venture (by Gazprom and NIOC) to build such a plant and could then export compressed gas to Laos, Cambodia and India,” Omid Shokri Kalehsar continued.

Nikolai Kozhanov, an Iranian-affairs expert in St. Petersburg, pointed to the problems with the planned construction of an LNG plant in Iran.

 “I’m skeptical about export-oriented gas projects in Iran, all the more so when we talk about LNG technologies. One problem is that Iran is consuming more natural gas than it produces and I don’t think it will be have enough gas to sell abroad any time soon. Another problem is that the technology of LNG production is still in a development stage in Russia, which cannot buy them abroad due to the sanctions. That’s why I think that Gazprom is either working for the long haul or has a way to acquire the knowhow and equipment from its Western partners,” Kozhanov said.

“I still don’t believe that such a project could be implemented in Iran, at least for now,” he added.

Russia is planning to expand economic cooperation with the Islamic Republic of Iran in the oil and gas industry to ensure sustainable economic development, President Vladimir Putin said after meeting his Iranian counterpart, Hassan Rouhani in Moscow

https://sputniknews.com/middleeast/201706011054197815-russia-iran-lng/

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