SINGAPORE (ICIS)--Week-long street protests in Iran have had little direct impact on trade and production of base oils so far amid signs that the unrest could be winding down.
There have been no known disruptions to any of the main refineries in Iran, according to market sources. Iran is a major producer of Group I base oils and one of its main export markets is the United Arab Emirates (UAE). Iran has an installed base oils production capacity of over 1 million tonnes.
The protests have affected a number of cities in Iran, including Isfahan and Tehran, where a number of refineries are located.
In the base oils market this week, prices of Iran-origin Group I SN500 and SN150 base oils were firmer by $10/tonne mainly driven by persistent supply shortages instead of any direct impact from the protests.
Bulk spot prices of SN500 in Iran were at $775-800/tonne FOB (free on board) Iran in the week ended 4 January. Spot prices of SN150 were also notionally firmer at $690-725/tonne FOB Iran amid limited trade discussions.
“Everything is well,” said one source in Iran.
Other market sources with knowledge of Iranian affairs also concurred, saying they had not heard of any direct impact on trade discussions or on production in the broader petrochemicals sector.
“I think the problem will be in the clearance (of cargoes) but not for the orders negotiation,” commented another source.
But there have been some suggestions that Iranians are also watering down their comments about the events taking place there on fears that the government has stepped up monitoring of communications related to the protests.
“(You) never know who has access and to what,” commented a source who regularly conducts business in Iran. “The conversations I have generally steer clear of political things.”
The Iranian government was believed to have restricted access to social media at the height of the protests.
The protests started in late December in the city of Mashhad and were believed to have been initially targeted at the state of the economy and the rising cost of living.
Western media reports said they have since evolved into broader anti-government protests.
It is unclear how widespread the protests actually are or how popularly supported they are but Iranian sources have also expressed hope that these protests would not be prolonged.
“We hope they (protests) be solved soon,” said one of the sources.
According to Iran-based Fars News Agency, the head of Iran’s Islamic Revolutionary Guards Corps (IRGC) on Wednesday declared that the days of “unrests and riots” had ended. Iranian government officials have also pointed fingers at the US, accusing it of meddling in Iranian affairs through its support of the protests.
The protests are taking place at another crucial time for Iran. US President Donald Trump is due to decide in mid-January whether or not Iran is in compliance with a landmark nuclear deal which allowed the lifting of some sanctions against it. Iran and six world powers agreed the deal in January 2016.
President Trump in October 2017 refused to re-certify the agreement but did not re-impose sanctions or completely pull out of the deal. The US Congress has been working on toughening some clauses in the agreement, media reports said.