The election of Masoud Pezeshkian as President of Iran could mark a crucial turning point for Asian oil buyers. By focusing on reviving the nuclear agreement with the West and lifting international sanctions, Pezeshkian aims to restore Iranian oil flows to normal levels. According to analysts and traders, this development could stabilize the Asian oil market.
Potential Impacts on the Asian Oil Market
Asian buyers, particularly in China, Japan and South Korea, are keeping a close eye on possible changes in oil policy under the new regime. Tushar Bansal, Senior Director at EY Parthenon, points out that to have a significant impact on oil prices this winter, an agreement with the West must be reached before September. If successful, this would also attract foreign investment to Iran’s former oil fields.
Reactions from Asian refineries
Japanese and South Korean refineries, major consumers of Iranian condensates, are cautiously optimistic. Before the sanctions, South Korea was one of the biggest buyers of Iranian crude oil and condensates, purchasing 148 million barrels in 2017. Japanese refiners, for their part, particularly appreciated the qualities of Iranian Heavy and Forozan crudes.
Outlook for China and India
Despite sanctions, Iran remains a key supplier of heavier crudes to China. A Beijing-based analyst predicts political adjustments after the presidential election, which could alter the oil export process. In India, refiners are eagerly awaiting the possibility of resuming imports of Iranian oil, a traditionally important source for the country.
The election of Masoud Pezeshkian could be a catalyst for the revival of Iranian oil exports to Asia, despite the many political and economic challenges. If Iran succeeds in negotiating the lifting of sanctions, Asian oil markets could experience a period of increased stability, beneficial for buyers in the region. However, the realization of these hopes will depend heavily on the forthcoming international negotiations and the new president’s ability to navigate Iran’s complex political landscape.
