The analyst now expects Iran’s oil output to fall to 2.27 MMb/d from July onwards. Most of the ‘lost’ oil will be of medium-sour and heavy-sour quality.
However, Bjørnar Tonhaugen, head of oil market research at Rystad, said that Saudi Arabia and its allies could easily make up the shortfall, and this would likely limit the positive impact on crude prices.
Since last October 2018, Saudi Arabia, Russia, the UAE, and Iraq have cut their production cumulatively by 1.3 MMb/d.
In April 2018, Iran was exporting around 2.5 MMb/d of crude, but exports have since fallen to 1.1 MMb/d.
“In our new base case, we no longer expect India to buy Iranian oil after May,” Tonhaugen said, “and now only expect China and Turkey to continue purchasing Iranian cargoes.
“We lower our Iranian crude exports estimate from 900,000 b/d to 600,000 b/d from May 2019 onwards, allocating around 500,000 b/d of exports to China and the remainder to Turkey.”