Iran Increases Oil Exports, Saudi Arabia Sells at Lower Prices

Reuters reports that over 20 supertankers from Europe and Asia are currently transporting oil from Iran to its customers, allowing Tehran to further increase its exports. Simultaneously, reports indicate that Saudi Arabia is reducing its oil prices for European customers. According to data accessed by Reuters, more than 20 supertankers from Europe and Asia have been transporting or loading Iranian oil in the past two weeks, with the tankers estimated to have a capacity of about 25 million barrels of crude and light oil. However, some major companies are still refraining from entering the oil transfer process due to remaining U.S. sanctions, but Reuters' information indicates that currently 'more than one-third' of Iran's oil exports are conducted using foreign ships. According to Reuters, the use of these ships allows Iran to increase its oil exports more rapidly than analysts had predicted. The increase in foreign tankers is attributed to the rise in temporary and limited insurance coverage from 'P&I Clubs,' a mutual marine insurance association. This group includes 13 major companies in shipping insurance and increased its insurance coverage from 70 million euros to 100 million euros ($111 million) in April. Concurrently, the Wall Street Journal reports that Saudi Arabia reduced its export oil prices to Europe on June 6. According to the newspaper, Aramco informed its customers via email that it is lowering the price of its light oil for July by 35 cents for Northwest Europe and by 10 cents for Mediterranean customers. The Wall Street Journal notes that this price reduction is 'unexpected' as oil demand typically increases in the second half of the year. Aramco's email to its customers comes as the OPEC meeting on June 1 ended without an agreement on production ceilings, effectively giving a 'blank check' to two major producers and rival countries to export oil as they wish. According to Reuters, Iran's oil exports in April and May ranged between 2.1 and 2.3 million barrels per day, which is 1.3 million barrels more than the same period last year, when Iran was still under sanctions and sold oil only to a few Asian customers. India, Japan, and China remain Iran's largest oil buyers, but at least four foreign tankers have recently headed to Europe. Last month, Iran exported 'more than two million barrels' of oil daily.