Oil market participants had largely priced in the US exit from the Iran nuclear deal announced ahead of the May 12 deadline by President Donald Trump this week, but were taken aback somewhat by the full force of economic sanctions that have been lined up against the Islamic Republic.
The sanctions targeting the sales and shipping of Iran’s crude and condensate overseas will kick in on November 4, giving holders of current contracts about six months to wind down their transactions.
These “secondary sanctions”, which were removed by the 2015 nuclear deal, are the most powerful tool the US has for penalising Iran by indirectly restricting non-US entities from doing business with the country. These could push away some of Iran’s crude buyers, force others to pare down their purchase volumes, and deprive Iranian oil shipments of insurance cover.
The International Group of Protection & Indemnity Clubs expects the US decision to have “significant implications for maritime trade with Iran and the insurance of such trade.” But it considers a full assessment possible only after the position of the remaining signatories in the Iran nuclear deal is clear.
Brent and WTI had jumped to new 41-month highs at Thursday’s market close, notching cumulative gains of 4.0-5.6% over four days of rally that began at the end of the previous week and was punctuated by only one day of losses. However, the upward momentum had subsided by Friday. Brent has vaulted over $77 but may not have the steam to reach $80, the psychologically important mark that market participants have been on the lookout for amid a growing Iran fear premium over the past several weeks.
The European signatories to the 2015 Joint Comprehensive Plan of Action are said to be scrambling to save the deal, with a meeting of the foreign ministers including Iran planned for Monday. But what would a salvaged deal look like? And what reassurance would it give Iran if US sanctions hit the country where it hurts most? Will the Europeans be able to secure waivers for their refiners and insurers? And if they do, will the US lose its leverage?
US Secretary of State Mike Pompeo has declared his intention to begin talks with allies in Europe, the Middle East and Asia in a bid to persuade them to press Iran back to the negotiating table over its nuclear and missile development programs. That adds another layer of complexity to European efforts to preserve the current deal. If Pompeo succeeds in initiating discussions, is it possible that the US will hold off on the sanctions and use the threat as leverage? Would Iran be a willing party?
The recent escalation in warfare between Israel and Iranian forces in Syria has added to supply worries stemming from the surging multi-faceted tensions in the Middle East. Could a rattled Iran spark off a bigger conflict in the region or cool off like North Korea’s Kim Jong Un?
The potential loss of 200-300,000 b/d of Iran’s supplies under US sanctions — this time without the support of its European allies — is factored into crude prices for now. Any further moves will demand answers to some fundamental questions and a likely scenario to emerge from a multitude of vastly different possibilities. That will take time.
Fear has brought Brent in the vicinity of $80. However, the leap towards that mark will demand evidence from supply fundamentals.
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Already, lubricant players have established their footholds here in Bangladesh, with international brands.
However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.
For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands.
Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market.
The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.
The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.
A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.Why “Lubricants shelf” is key to monitor engine oil market?
The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.
And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.
You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.
Regularly, lubricants retailers have to welcome the representatives of newly entered brands.
And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.
On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.
However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
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