Oil risk flares in Iran nuclear talks amid unrest in Iraq

Targeting Iranian crude exports to force cuts in the nation’s nuclear program is becoming a riskier strategy for oil markets as violence erupts in neighboring Iraq and supply disruptions persist in Libya.
Negotiators from the U.S., Russia, China, Germany, France, and the UK have returned to talks with Iranian officials in Vienna to discuss a deal that would lift sanctions on energy, banking, shipping, and other areas of trade in return for Iran ensuring its nuclear program is peaceful.
Last year, Iran agreed to scale back the program and got limited relief from bans on petrochemicals, gold, and auto trade.
The talks are colliding with increased fighting across northern Iraq, the world’s fourth-largest crude exporter, and political feuding in Libya, holder of Africa’s biggest oil reserves, where output has dropped.
The six nations will be weighing whether to keep curbs on Iran, which has been allowed to maintain exports at about 1.1 million barrels a day under the temporary pact expiring July 20. The Persian Gulf nation was shipping 2.5 million barrels before sanctions.
“Iranian oil has been helping at this difficult time in markets,” Robin Mills, a Dubai-based analyst at Manaar Energy Consulting & Project Management who previously worked as an engineer on Iran for Royal Dutch Shell Plc, said by phone on June 30.
“If you start taking more Iranian oil off the market, it will tighten and you put yourself in the bad situation of having less flexibility.”

Biggest threat
Brent crude traded at about $112 a barrel on Tuesday on the London-based ICE Futures Europe exchange. It rose to $115.71 on June 19, a nine-month high. Options prices are close to the most bullish they’ve been in 10 months and volatility in Brent has climbed from a record low because of the fighting in Iraq.
Forces from the militant group that now calls itself the Islamic State seized towns in northern Iraq and attacked the nation’s biggest oil refinery last month.
The fighting poses the single biggest threat to new output this decade within the Organization of Petroleum Exporting Countries, which supplies 40 percent of the world’s oil, according to the International Energy Agency, a Paris-based adviser to 29 nations.
Iran will probably export crude at current levels in the second half of the year, according to a Bloomberg survey of six oil analysts. The talks in Vienna will probably be extended for another six months with no additional oil sanctions imposed on Iran, they said.

Crude exports
Two U.S. officials who weren’t authorized to be quoted said Iranian crude exports are within the range allowed by the interim deal. Iran’s shipments of crude and condensate last year were about 1.04 million barrels a day, according to customs and IEA data compiled by Bloomberg.
Iraq and Iran are both members of the Organization of Petroleum Exporting Countries, which will need to pump the most in two years over the next six months to meet record global demand of 94 million barrels a day in the fourth quarter, the IEA said June 13. It raised its estimate for how much consumers will demand of the group’s oil by 300,000 barrels a day to 30.9 million on average in the second half, almost 1 million more than OPEC’s own target.
“The balance in world oil supplies is much tighter than was expected at the beginning of this year,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by phone June 30. “Definitely sanctions are not off the table. But the escalation of the situation in Iraq comes at no good time for such sanctions. We don’t have such spare capacity at the moment to cope with the possible shortfall from Iraq as well.”
The six nations negotiating with Iran are determined to reach a “comprehensive agreement” by July 20, European Union spokesman Michael Mann said in an e-mail June 26.
Iran officials hope the talks will result in such an accord, Deputy Foreign Minister Abbas Araqchi told the Tehran-based SNN news agency on June 29.
Risks of supply disruptions elsewhere in the world may not translate into output reductions in practice, Cliff Kupchan, a Washington-based consultant at Eurasia Group who specializes in Iran, said by phone June 26.

Robust supply
“Supply will remain relatively robust despite the current range of geopolitical crises,” Kupchan said. Libya’s output is likely to recover and there are no immediate risks to shipments from Iraq’s south, home to most of the nation’s production, he said.
Political and security issues have also kept Nigerian crude off the market and raised concern that future production may be at risk, the IEA said in its mid-year report published June 17. Conflict in Syria, South Sudan, and Yemen will also hurt output this year, the IEA said.

Iraq production
Iraq’s oil production has mostly been unaffected by the fighting in the north. The nation will export close to a record 2.8 million barrels a day this month, according to loading programs obtained by Bloomberg.
Still, the threat of widening violence in Iraq spurred speculation that the country’s long-term supply gains won’t be as high as the government’s forecast — that production will exceed 8 million barrels a day from 2018.
By contrast, Iran can pump more oil than it is now. The nation’s output averaged 2.6 million barrels a day last year, the lowest since 1989, according to data compiled by Bloomberg.
“Every additional barrel of oil Iran can sell is good news for them,” said Abhishek Deshpande, a crude markets analyst at Natixis SA in London. This month “we’ll have a better sense of where talks are going and we’re most likely to have an extension to December.”
(Source: Bloomberg)

Oil risk flares in Iran nuclear talks amid unrest in Iraq

Targeting Iranian crude exports to force cuts in the nation’s nuclear program is becoming a riskier strategy for oil markets as violence erupts in neighboring Iraq and supply disruptions persist in Libya.
Negotiators from the U.S., Russia, China, Germany, France, and the UK have returned to talks with Iranian officials in Vienna to discuss a deal that would lift sanctions on energy, banking, shipping, and other areas of trade in return for Iran ensuring its nuclear program is peaceful.
Last year, Iran agreed to scale back the program and got limited relief from bans on petrochemicals, gold, and auto trade.
The talks are colliding with increased fighting across northern Iraq, the world’s fourth-largest crude exporter, and political feuding in Libya, holder of Africa’s biggest oil reserves, where output has dropped.
The six nations will be weighing whether to keep curbs on Iran, which has been allowed to maintain exports at about 1.1 million barrels a day under the temporary pact expiring July 20. The Persian Gulf nation was shipping 2.5 million barrels before sanctions.
“Iranian oil has been helping at this difficult time in markets,” Robin Mills, a Dubai-based analyst at Manaar Energy Consulting & Project Management who previously worked as an engineer on Iran for Royal Dutch Shell Plc, said by phone on June 30.
“If you start taking more Iranian oil off the market, it will tighten and you put yourself in the bad situation of having less flexibility.”

Biggest threat
Brent crude traded at about $112 a barrel on Tuesday on the London-based ICE Futures Europe exchange. It rose to $115.71 on June 19, a nine-month high. Options prices are close to the most bullish they’ve been in 10 months and volatility in Brent has climbed from a record low because of the fighting in Iraq.
Forces from the militant group that now calls itself the Islamic State seized towns in northern Iraq and attacked the nation’s biggest oil refinery last month.
The fighting poses the single biggest threat to new output this decade within the Organization of Petroleum Exporting Countries, which supplies 40 percent of the world’s oil, according to the International Energy Agency, a Paris-based adviser to 29 nations.
Iran will probably export crude at current levels in the second half of the year, according to a Bloomberg survey of six oil analysts. The talks in Vienna will probably be extended for another six months with no additional oil sanctions imposed on Iran, they said.

Crude exports
Two U.S. officials who weren’t authorized to be quoted said Iranian crude exports are within the range allowed by the interim deal. Iran’s shipments of crude and condensate last year were about 1.04 million barrels a day, according to customs and IEA data compiled by Bloomberg.
Iraq and Iran are both members of the Organization of Petroleum Exporting Countries, which will need to pump the most in two years over the next six months to meet record global demand of 94 million barrels a day in the fourth quarter, the IEA said June 13. It raised its estimate for how much consumers will demand of the group’s oil by 300,000 barrels a day to 30.9 million on average in the second half, almost 1 million more than OPEC’s own target.
“The balance in world oil supplies is much tighter than was expected at the beginning of this year,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by phone June 30. “Definitely sanctions are not off the table. But the escalation of the situation in Iraq comes at no good time for such sanctions. We don’t have such spare capacity at the moment to cope with the possible shortfall from Iraq as well.”
The six nations negotiating with Iran are determined to reach a “comprehensive agreement” by July 20, European Union spokesman Michael Mann said in an e-mail June 26.
Iran officials hope the talks will result in such an accord, Deputy Foreign Minister Abbas Araqchi told the Tehran-based SNN news agency on June 29.
Risks of supply disruptions elsewhere in the world may not translate into output reductions in practice, Cliff Kupchan, a Washington-based consultant at Eurasia Group who specializes in Iran, said by phone June 26.

Robust supply
“Supply will remain relatively robust despite the current range of geopolitical crises,” Kupchan said. Libya’s output is likely to recover and there are no immediate risks to shipments from Iraq’s south, home to most of the nation’s production, he said.
Political and security issues have also kept Nigerian crude off the market and raised concern that future production may be at risk, the IEA said in its mid-year report published June 17. Conflict in Syria, South Sudan, and Yemen will also hurt output this year, the IEA said.

Iraq production
Iraq’s oil production has mostly been unaffected by the fighting in the north. The nation will export close to a record 2.8 million barrels a day this month, according to loading programs obtained by Bloomberg.
Still, the threat of widening violence in Iraq spurred speculation that the country’s long-term supply gains won’t be as high as the government’s forecast — that production will exceed 8 million barrels a day from 2018.
By contrast, Iran can pump more oil than it is now. The nation’s output averaged 2.6 million barrels a day last year, the lowest since 1989, according to data compiled by Bloomberg.
“Every additional barrel of oil Iran can sell is good news for them,” said Abhishek Deshpande, a crude markets analyst at Natixis SA in London. This month “we’ll have a better sense of where talks are going and we’re most likely to have an extension to December.”
(Source: Bloomberg)

Iran prepares package of incentives to boost domestic production

TEHRAN – The Iranian Industry, Mines, and Trade Ministry has prepared a special package of incentives to boost the domestic production.

The incentive program has been submitted to the administration to help the national economy come out of recession, the IRNA news agency quoted Iranian Industry, Mines, and Trade Minister Mohammadreza Ne’matzadeh as saying on Tuesday.

Ne’matzadeh made the remarks in a ceremony which was held in Tehran on Tuesday to mark the National Day of Industry and Mine.

The Ministry has adopted strategic development policies in line with guidelines of the Supreme Leader to promote the economy of resistance, he stated.

He emphasized that in order to cope with the economic recession, the industry and mine sector’s share of banking facilities should be increased.

The Ministry has also resumed providing exemplary exporters with incentives to help boost non-oil exports, he added.

In April, the International Monetary Fund (IMF) said Iran’s economy had contracted by 1.7 percent in 2013. However, the economy will come out of recession in 2014, the report added.

The Iranian economy will grow by 1.5 percent in 2014 and the growth rate will hit 2.3 percent in 2015, according to the report.

Recently, Iranian President Hassan Rouhani said various institutions under the administration are now bound to carry out the “resistance economy” plan, which has been outlined by Supreme Leader Ayatollah Ali Khamenei to counter sanctions of the West.

The administration would work with the other branches of government to materialize objectives of the plan, Rouhani said.

On February 19, Ayatollah Khamenei outlined the general policies of the program to promote the “economy of resistance”, which can lead the Iranian nation to victory in “the imposed economic war” with the West.

Under the program, the government must take action to expand the production and exportation of knowledge-based products, increase domestic production of strategic goods, and develop markets in neighboring countries.

It also encourages greater privatization and increased exports of electricity, gas, petrochemicals, and oil byproducts instead of crude oil and other raw materials.

Interest in Iran as a destination for business is growing ahead of the international talks, which are being held to resolve the deadlock over Iran’s nuclear program.

If the discussions between the six major powers and Iran progress smoothly, it is expected that the sanctions imposed on the country will be eased and commercial routes will be revived.

Business Monitor said in its April report that the Iranian economy will return to growth in 2014, as the improvement in relations with the West and better macroeconomic management will lead to an improved outlook for exports and increased business and consumer confidence.

Iran prepares package of incentives to boost domestic production

TEHRAN – The Iranian Industry, Mines, and Trade Ministry has prepared a special package of incentives to boost the domestic production.

The incentive program has been submitted to the administration to help the national economy come out of recession, the IRNA news agency quoted Iranian Industry, Mines, and Trade Minister Mohammadreza Ne’matzadeh as saying on Tuesday.

Ne’matzadeh made the remarks in a ceremony which was held in Tehran on Tuesday to mark the National Day of Industry and Mine.

The Ministry has adopted strategic development policies in line with guidelines of the Supreme Leader to promote the economy of resistance, he stated.

He emphasized that in order to cope with the economic recession, the industry and mine sector’s share of banking facilities should be increased.

The Ministry has also resumed providing exemplary exporters with incentives to help boost non-oil exports, he added.

In April, the International Monetary Fund (IMF) said Iran’s economy had contracted by 1.7 percent in 2013. However, the economy will come out of recession in 2014, the report added.

The Iranian economy will grow by 1.5 percent in 2014 and the growth rate will hit 2.3 percent in 2015, according to the report.

Recently, Iranian President Hassan Rouhani said various institutions under the administration are now bound to carry out the “resistance economy” plan, which has been outlined by Supreme Leader Ayatollah Ali Khamenei to counter sanctions of the West.

The administration would work with the other branches of government to materialize objectives of the plan, Rouhani said.

On February 19, Ayatollah Khamenei outlined the general policies of the program to promote the “economy of resistance”, which can lead the Iranian nation to victory in “the imposed economic war” with the West.

Under the program, the government must take action to expand the production and exportation of knowledge-based products, increase domestic production of strategic goods, and develop markets in neighboring countries.

It also encourages greater privatization and increased exports of electricity, gas, petrochemicals, and oil byproducts instead of crude oil and other raw materials.

Interest in Iran as a destination for business is growing ahead of the international talks, which are being held to resolve the deadlock over Iran’s nuclear program.

If the discussions between the six major powers and Iran progress smoothly, it is expected that the sanctions imposed on the country will be eased and commercial routes will be revived.

Business Monitor said in its April report that the Iranian economy will return to growth in 2014, as the improvement in relations with the West and better macroeconomic management will lead to an improved outlook for exports and increased business and consumer confidence.

Transit of goods via Iran rises 2.4% in spring 2014

TEHRAN – Over 3.48 million tons of goods were transited via Iran in spring 2014, a 2.4 percent rise compared with spring 2013, an official at the Iranian Roads Maintenance Organization said on Tuesday.

Spring 2014 corresponds to the first quarter of the current Iranian calendar year (March 21-June 21).

Some 96 percent of the goods were transited by roads, showing 3.5 percent rise compared to the same period of time last year, the Tasnim News Agency quoted Iranian Roads Maintenance Organization official Mohammad Javad Atrchian as saying.

The transited consignments mostly consisted of fuel, home appliances, cotton, construction materials and vehicles.

Over 12 million tons of goods were transited via Iran in the past Iranian calendar year, which ended on March 20, 2014, a 4 percent rise year on year.

Iran earns some 14 trillion rials (about $437.5 million) annually through transiting goods via ports.

In September 2013, Iranian Transport and Urban Development Minister Abbas Akhoundi said that Iran plans to quadruple transit of goods to as much as 50 million tons per year.

Transit of goods via Iran rises 2.4% in spring 2014

TEHRAN – Over 3.48 million tons of goods were transited via Iran in spring 2014, a 2.4 percent rise compared with spring 2013, an official at the Iranian Roads Maintenance Organization said on Tuesday.

Spring 2014 corresponds to the first quarter of the current Iranian calendar year (March 21-June 21).

Some 96 percent of the goods were transited by roads, showing 3.5 percent rise compared to the same period of time last year, the Tasnim News Agency quoted Iranian Roads Maintenance Organization official Mohammad Javad Atrchian as saying.

The transited consignments mostly consisted of fuel, home appliances, cotton, construction materials and vehicles.

Over 12 million tons of goods were transited via Iran in the past Iranian calendar year, which ended on March 20, 2014, a 4 percent rise year on year.

Iran earns some 14 trillion rials (about $437.5 million) annually through transiting goods via ports.

In September 2013, Iranian Transport and Urban Development Minister Abbas Akhoundi said that Iran plans to quadruple transit of goods to as much as 50 million tons per year.

Chinese companies to fund Iranian railway signaling project

TEHRAN – Two Chinese companies will fund the implementation of the Tehran-Mashhad railway signaling project in Iran.

Railway signaling is a system used to control railway traffic safely, essentially to prevent trains from colliding.
The Chinese companies CMC and SUPOWER have signed a deal with the Iranian Railways Company to invest in the 900-kilometer Tehran-Mashhad railway signaling project, the IRNA news agency reported on Monday.
A consortium comprised of subsidiaries of the Iran Power Plant Projects Management Company, known as MAPNA, will cooperate with the Chinese partners in the project.
On February 23, Iran and China signed an agreement in Tehran, finalizing a roadmap to double bilateral trade over the course of three years.
The two countries expressed interest in boosting cooperation in a wide range of areas, such as the industrial, oil, gas, petrochemical, mining, banking, transportation, energy, communications, and information technology sectors.
In December 2013, then Iran-China Joint Chamber of Commerce chairman Asadollah Asgaroladi announced that annual trade between Iran and China could reach $38 billion by the end of Iranian calendar year 1392 (March 20, 2014).
MG/HG

Chinese companies to fund Iranian railway signaling project

TEHRAN – Two Chinese companies will fund the implementation of the Tehran-Mashhad railway signaling project in Iran.

Railway signaling is a system used to control railway traffic safely, essentially to prevent trains from colliding.
The Chinese companies CMC and SUPOWER have signed a deal with the Iranian Railways Company to invest in the 900-kilometer Tehran-Mashhad railway signaling project, the IRNA news agency reported on Monday.
A consortium comprised of subsidiaries of the Iran Power Plant Projects Management Company, known as MAPNA, will cooperate with the Chinese partners in the project.
On February 23, Iran and China signed an agreement in Tehran, finalizing a roadmap to double bilateral trade over the course of three years.
The two countries expressed interest in boosting cooperation in a wide range of areas, such as the industrial, oil, gas, petrochemical, mining, banking, transportation, energy, communications, and information technology sectors.
In December 2013, then Iran-China Joint Chamber of Commerce chairman Asadollah Asgaroladi announced that annual trade between Iran and China could reach $38 billion by the end of Iranian calendar year 1392 (March 20, 2014).
MG/HG

Iran’s 3-month non-oil trade exceeds $24.2b

TEHRAN – Iran’s total non-oil trade surpassed $24.2 billion in spring 2014, according to the Iran Customs Administration.

Iran exported $11.85 billion worth of non-oil products and imported $12.38 billion worth of non-oil products in spring 2014, which corresponds to the first quarter of the current Iranian calendar year (March 21-June 21).
In comparison with the same period last year, the country’s non-oil exports and non-oil imports rose by 20.53 percent and 35.63 percent, respectively.
China, Iraq, and the United Arab Emirates were the top three importers of Iranian non-oil goods. And the United Arab Emirates, China, and India were the leading exporters of non-oil goods to Iran.
Interest in Iran as a destination for business is growing ahead of the international talks, which are being held to resolve the deadlock over Iran’s nuclear program.
If the discussions between the six major powers and Iran progress smoothly, it is expected that the sanctions imposed on the country will be eased and commercial routes will be revived.
MA/HG

Iran’s 3-month non-oil trade exceeds $24.2b

TEHRAN – Iran’s total non-oil trade surpassed $24.2 billion in spring 2014, according to the Iran Customs Administration.

Iran exported $11.85 billion worth of non-oil products and imported $12.38 billion worth of non-oil products in spring 2014, which corresponds to the first quarter of the current Iranian calendar year (March 21-June 21).
In comparison with the same period last year, the country’s non-oil exports and non-oil imports rose by 20.53 percent and 35.63 percent, respectively.
China, Iraq, and the United Arab Emirates were the top three importers of Iranian non-oil goods. And the United Arab Emirates, China, and India were the leading exporters of non-oil goods to Iran.
Interest in Iran as a destination for business is growing ahead of the international talks, which are being held to resolve the deadlock over Iran’s nuclear program.
If the discussions between the six major powers and Iran progress smoothly, it is expected that the sanctions imposed on the country will be eased and commercial routes will be revived.
MA/HG