http://www.commodityonline.com/news/india-to-import-iran-oil-even-without-eu-tanker-insurance-47667-3-47668.html
MUMBAI (Commodity Online): India is reportedly preparing to import oil from Iran despite EU sanctions depriving India's oil tankers insurance against spills or accidents. Iran is a major supplier of oil to India and as such the country cannot afford to lose out on Iranian supplies.
India's major shipping firms have asked the state insurers to provide $50 million in third party liability coverage per tanker per voyage. The cover is however negligible when considering that most supertankers are typically insured for $1 billion. And there is a reason for such a big insurance coverage. The Exxon Valdez oil spill cost $7 billion in damages. But Indian shipping firms are not planning for such big cover.
"To the best of our knowledge, over the last 10 years, none of the Indian shipping companies carrying Iranian crude oil into India has had any major incident relating to pollution or anything. Since there have been no claims in 10 years, we felt if we have cover of $50 million as a commercial organization it would be worthwhile for us to continue in that business", Reuters quotes Shipping Corp Chairman S. Hajara
and....
http://www.commodityonline.com/news/saudi-arabia-may-become-a-net-importer-of-fuel-oil-this-summer-47678-3-47679.html
NEW YORK (Commodity Online): While there is a lot of focus in the market on the scale of Russian refinery upgrades, the tightening in the second half of the year is likely to come on changing dynamics in the Middle East. That Middle East fuel oil demand is particularly high in the summer is no news, yet trade flows are likely to change significantly this summer.
Fuel oil demand in the Middle East region has risen by about 2% annually over the past ten years, with Saudi Arabia accounting for a large part of that growth. However, in recent years, incremental power generation has been met by direct crude burn and, increasingly, diesel, lowering fuel oil demand growth significantly. In 2005, the gap between a low consumption point of 1.1 mb/d and a high of 1.5 mb/d was 370 thousand b/d. By 2009, that seasonal gap had more than doubled, from 1.5 mb/d to 2.4 mb/d, and by 2011, the gap had increased to an historical high of 750 thousand b/d.
However, the up swing in power generation in the country this summer is likely to be met by higher fuel oil usage, as the kingdom aims to rely as little as possible on direct crude burn at a time when global spare capacity is thin and the call on its crude exports is likely to remain high. Utilities have already started getting ready, expanding the number of units able to generate power from fuel oil. If the summer temperatures are high enough, there is a strong likelihood that not only will Saudi exports of fuel oil fall to zero, but it may even turn into a net importer. This in itself is a major swing factor for the fuel oil market as Saudi exports have averaged 775 kt/month over the past 14 months.
Though Saudi Arabia is in the process of adding almost 1 mb/d of refining capacity by the middle of this decade, Saudi demand for fuel oil will likely continue to rise despite the greater use of gas and solar in power generation and desalinisation.
and.....
http://www.upi.com/Business_News/Energy-Resources/2012/04/25/Oil-worries-grow-over-Iranian-sanctions/UPI-18501335352488/
PARIS, April 25 (UPI) -- Saudi Arabia can provide only a small amount of relief in the energy sector once U.S. and European sanctions on Iran go into force in July, an analyst said.
U.S. and European sanctions targeting Iran's oil revenues are to go into full force July 1. Michael Wittner, global head of oil market research at Societe Generale, was quoted by Bloomberg News as saying Saudi Arabia has only a "very narrow cushion" to protect against any expected oil shortages.
"Saudi production will have to go even higher in the coming months, as sanctions are fully implemented and as refinery crude demand and runs increase seasonally, beginning in May," he said.
Some European countries, along with Japan, have cut back on Iranian crude oil imports by a combined 638,000 barrels per day prompting Riyadh to increase production to 10 million bpd earlier this year.
Wittner said he expected the International Energy Agency to coordinate a release of strategic petroleum reserves around the July deadline but any price relief would be temporary.
Any emergency release of petroleum stockpiles, he said, will "occur against a strongly bullish backdrop of stock draws and tightening spare capacity."
U.S. and European sanctions targeting Iran's oil revenues are to go into full force July 1. Michael Wittner, global head of oil market research at Societe Generale, was quoted by Bloomberg News as saying Saudi Arabia has only a "very narrow cushion" to protect against any expected oil shortages.
"Saudi production will have to go even higher in the coming months, as sanctions are fully implemented and as refinery crude demand and runs increase seasonally, beginning in May," he said.
Some European countries, along with Japan, have cut back on Iranian crude oil imports by a combined 638,000 barrels per day prompting Riyadh to increase production to 10 million bpd earlier this year.
Wittner said he expected the International Energy Agency to coordinate a release of strategic petroleum reserves around the July deadline but any price relief would be temporary.
Any emergency release of petroleum stockpiles, he said, will "occur against a strongly bullish backdrop of stock draws and tightening spare capacity."
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