Iran condensate on the rise

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And we welcome the distraction of tomorrow’s inventory report with open arms, as well as Nonfarm Friday after that, as it takes some focus away from the ongoing OPEC shenanigans. As prices maintain a footing despite a super-strong dollar, hark, here are five things to consider in oil markets.   

1) Iranian export loadings continue to hold close to pre-sanction levels of 2.6 million barrels per day, buoyed by a rise in export loadings of South Pars condensate. Production of the condensate is currently at around 550,000 bpd, and as our ClipperData illustrate below, the vast majority of this is getting exported – all loaded at Asaluyeh. 

Projections suggest exports could keep on rising, with barrels being pulled from floating storage to meet demand. Our latest floating storage report pegs Iranian barrels at just over 32 million barrels. The leading destination of South Pars condensate so far this year is South Korea, followed by UAE, Japan and China.  

south_pars_condensate.jpg2) Even though Hurricane Matthew is not set to enter the Gulf of Mexico, it will have all manner of other ramifications on crude flows despite the lack of threat to U.S. oil and gas infrastructure. While the storm is set to hinder imports into the Gulf coast (and gasoline flows to the East coast later in the week, most likely), it is also causing the shutting in of 33mn bbls of storage in the Bahamas.

There are two key storage terminals in the Bahamas: Buckeye’s Freeport terminal, which has storage capacity of 26.2mn bbls, and Statoil’s South Riding terminal, which has 6.7 mn bbls of capacity. The two send oil to nine different countries, but with the U.S. being the key destination. 

As our ClipperData illustrate below, crude loadings from the Bahamas to the U.S. have averaged 3.74 million barrels per month so far this year, with most coming from the Buckeye terminal. The majority of the crude in storage is from Latin America, which makes logical sense, given its proximity.

Colombian medium sour Vasconia accounts for just over half the export volumes from the Bahamas to the U.S. this year, with Venezuela’s heavy sour Merey in second place, accounting for