07 March 2012 00:58 [Source: ICIS news]
HOUSTON (ICIS)--Loss of Iranian oil shipments to Europe as a result of geopolitical pressures will likely have little impact on overall supply, an analyst said on Tuesday.
In 2011, the cut-off of oil exports from Libya as a result of civil unrest removed 1.5m bbl/day from the market, but did not make a significant dent on overall supply, said Managing Director Marco Alvera, managing director for Eni Trading and Shipping.
Alvera said the sanctions and loss of Iran oil exports should not have much of an impact either, though there is concern for the 18m bbl/day of oil transported through the Strait of Hormuz. He spoke at the CERAWeek energy conference in Houston.
Iranian oil supplies will likely go east as a result of sanctions by Europe and the US stemming from concerns over Iran's nuclear programme.
But investment researcher Jeffrey Currie of Goldman Sachs said Saudi Arabia will step up production to replace oil to the west.
He said Saudi Arabia was producing 9.7m-10m bbl/day of oil to replace losses from Iran.
Senior vice president of energy and national security Frank Verrastro of the Center for Strategic and International Studies (CSIS) said Europe is phasing in sanctions against Iranian oil. The phasing in will be complete as refineries come out of turnarounds, therefore boosting production levels, and come into the key demand driving season, he said.
Furthermore, instability in Egypt and Syria could lead to further supply disruptions, said Verrastro.
Elections and changes in governance for 2012 could be seen in India, Angola, China, Venezuela, Mexico, Russian and the US, said Verrastro. This could further add geopolitical pressures.
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