Oil prices are on the rise upon steep fall of Iranian crude export in August
By the end of August Brent hits $75, WTI - $68. At the same time, Iranian crude oil and condensate export decreased by 20% in the first half of the month, from 2.10 to 1.68 mln bpd, according to Platts.
Most of the demand drop came from India and Northwest Europe, notably France and Netherlands. However, Iranian export stands firm in Southern Europe, Eastern Mediterranean and Far East (China and Japan).
According to market sources, Iranian export to India and Northwest Europe was partially replaces by crude oil from Iraq, Saudi Arabia, Kuwait and UAE.
In particular, crude loadings from Iraq to India have risen by over 200,000 bpd, while dropping by nearly 600,000 bpd from Iran.
WoodMackenzie forecasts Brent prices to average $70-75 per barrel in 4Q 2018 and 2019.
Despite steep decline in Venezuela and expected fall in Iranian oil production, global supply will still outpace demand for the next two years.
Significant price drop is also unlikely due to narrow OPEC spare capacity.
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