By Henning Gloystein

SINGAPORE, Jan 15 (Reuters) – With Iran able to resume enterprise as normal with the world underneath a historic nuclear deal, Tehran will goal India, Asia’s fastest-growing main oil market, and outdated companions in Europe with lots of of 1000’s of barrels of its crude.

Iran expects the United Nations nuclear watchdog to verify on Friday it has curtailed its nuclear program, paving the way in which for the unfreezing of billions of {dollars} of property and an finish to bans which have crippled its oil exports.

Tehran plans to raise exports by 500,000 barrels per day (bpd) post-sanctions and progressively increase shipments by the identical quantity once more, including to a world glut and certain placing extra stress on oil costs which have already dropped 70 p.c since 2014, to beneath $30 per barrel.

Iran has 22 Very Large Crude Carriers (VLCCs) floating off its coast, with 13 absolutely or virtually absolutely loaded, mapping knowledge on Thomson Reuters’ Eikon confirmed, carrying sufficient crude to satisfy India’s import wants for nearly per week.

A senior Iranian supply shut to produce negotiations stated that the nation – which has the world’s fourth-biggest confirmed oil reserves – was focusing on India as its essential vacation spot for crude.

“Indian crude demand is growing faster than other Asian countries. Like our competitors, we see this country as one of the main targets for Asian sales,” stated the official, who spoke on situation of anonymity.

Iran hopes to lift its exports to India by 200,000 bpd, up from the 260,000 bpd at present shipped underneath sanctions’ restrictions, the official stated.

At the suitable worth, Indian refiners stated they had been eager to import extra from Iran, as demand for gas soars on 10 p.c annual progress in automobile gross sales, a fee that’s now sooner than China’s.

“We have a long-lasting relationship with Iran and post lifting of sanctions we will evaluate the scenario,” stated L Ok Gupta, managing director of India’s Essar Oil.

“It makes sense to buy oil from nearby options (like Iran),” stated H. Kumar, managing director of one other Indian oil agency, Mangalore Refinery and Petrochemicals, however added “intake will depend on prices.”

The Iranian official stated there was not a lot room for main export will increase to China, South Korea or Japan because of slowing demand and in addition due to a shift there in direction of extra non-Middle East crudes.

A South Korean refinery supply confirmed he didn’t anticipate an enormous enhance in Iranian provides, largely due to plentiful alternate options.

A Japanese refiner stated that his agency might solely take Iranian deliveries as soon as it had insurance coverage in place, which might take time.

OLD EUROPEAN PARTNERS

Iran already trades restricted quantities of oil primarily with Asian consumers legitimately underneath sanctions, however its crude exports have fallen to only over 1 million bpd, down from a peak of over 3 million bpd in 2011, pre-sanctions.

The Iranian official stated Tehran deliberate to revive provide offers with European companions as a way to ramp up exports.

Prior to sanctions, Iran was exporting as much as 800,000 bpd to Europe with the principle consumers being oil majors Royal Dutch Shell , Italy’s ENI and France’s Total Greek Hellenic Petroleum and Spain’s Repsol and Turkish corporations.

Most former consumers have repeatedly stated they’d be completely satisfied to renew imports however business particulars could possibly be mentioned solely after sanctions are lifted.

Iran’s Mehr information company quoted officers from the National Iranian Tanker Company (NITC) as saying on Friday that as quickly as sanctions are lifted some 200,000-220,000 bpd can be exported to France, Britain, Italy, Spain and Germany.

Shipping business affiliation BIMCO confirmed that European purchasers can be among the many first post-sanctions.

“Former clients of Iran are the ones who are likely to return as buyers… Italy, Spain and Greece were the top EU importers in 2011,” stated Peter Sand, BIMCO’s chief transport analyst.

Following years of under-investment, Iran wants overseas money to modernize its oil business.

ENI, Repsol and Total had been a few of the firms with the largest delegations at a convention in Tehran final November, throughout which Iran printed new phrases for overseas oil buyers.

Prospects for exports to the Americas, by no means a big marketplace for Iran, seem slim. Not solely do U.S. sanctions unrelated to the nuclear difficulty stay in impact, however the area is already inundated with provide from hovering U.S. and Canadian manufacturing.

CUT-THROAT MARKET

In a cut-throat market, Iran may additionally discover it tough to promote its oil because the heavy grades it principally presents are in low demand.

Latin American suppliers who produce related heavy crudes have been searching for new consumers in Asia.

Within the Middle East, merchants stated Iran’s essential competitor can be Iraq, which has efficiently returned to Asian markets lately, with exports rising above 3.5 million bpd.

In Europe, merchants stated Iran’s crude would compete primarily with Russian Urals and Iraqi grades, that are competitively priced.

In China and India, robust passenger automobile gross sales are fueling gasoline demand, whereas a slowdown in Asia’s heavy industries means slower demand for diesel, which heavy crudes are sometimes used to provide.

Iran does have mild crudes, however wants them for itself to scale back gasoline imports.

Either manner, Iran including to an over equipped world oil market is sure to place extra stress on costs.

“With Iran’s sooner return… there is still further downside risk to prices this quarter,” Barclays financial institution stated.

(Reporting by Nidhi Verma in New Delhi, Florence Tan, Keith Wallis and Jacob Gronholt-Pedersen in SINGAPORE, Meeyoung Cho in SEOUL, Osamu Tsukimori in TOKYO, and Amanda Cooper and Simon Falush in LONDON; Editing by Ed Davies and William Hardy)

(c) Copyright Thomson Reuters 2016.