Refreshing take on tackling a downturn

Does the thought of a recession spook you? Are memories of the last economic downturn in the wake of the US subprime mortgage crisis fairly raw? It might well be hard to avoid an economic downturn, but your chances of escaping unscathed and managing the situation depend on your tenacity and desire to rethink life as you know it, according to economist Jason Schenker.

Hammering home this central theme is his book – Recession-Proof: How to Survive and Thrive in an Economic Downturn released earlier this year by Lioncrest Publishing – which makes you sit up and take notice of both the obvious and the not so obvious when it comes to your career, investment and lifestyle choices versus the evolving macroeconomic climate.

The engaging tone of Schenker’s work spread out over 200 pages split by 11 chapters stands out. The book is full of practical suggestions, a pragmatic dose of stating of what’s evident (which some of us tend to ignore at our peril), a gentle nudge towards constructive soul searching and last, but not the least, one of the most refreshing elucidation of SWOT (strengths, weaknesses, opportunities, and threats) analysis that the Oilholic has read in recent years.

To quote the author, “a recession is partly a self-fulfilling prophecy. It happens partly because we think it’s going to happen. But that doesn’t make it any less real, or any less inevitable…It’s like that famous line in Dirty Harry: “Are you feeling lucky, punk?” When people are feeling lucky, there’s growth. When people aren’t feeling lucky, there’s contraction.”

And being prepared for all eventualities is what is required in this day and age of turbulence where fear and greed are seen to be driving markets, Schenker adds. Instead of feeling sorry in the event of a recession be bold, or better still spot economic turbulence before its hits your company, life and finances, all three of which are intertwined in more ways than one.

Schenker explains how he went about staying more than just afloat in previous downturns, and how you can too. All chapters are fascinating, but if the Oilholic was asked to pick his favourite passages, one would say Chapters Two (What does your personal recession look like?), Five (Dig In) and Seven (Run) would be among the most riveting ones.

This book is not some run-of-the-mill self-help guide. Rather parts of it might well jolt you into action. But perhaps that’s the jolt you need in life to be recession proof and the lessons Schenker learnt from challenges in his own life that form part of the subject matter strike a chord.

In the spirit of full disclosure, the Oilholic has known Schenker in a professional capacity for over ten years, since his days at Wachovia and one’s own at a CNBC Europe production team; and can personally testify that he never sits on the fence in any deliberation of any sort whether we’re discussing central banks, forex or OPEC's oil production quota.

His knack for plain-speaking is reflected in the narrative of the title. But Schenker’s book appeals to this blogger not because he’s an old friend, but because his work makes one sit up and take notice of things we often subconsciously ignore whether it comes to career or investment choices or for that matter which industry conference to attend!

The Oilholic is happy to recommend this title to the young and old alike, those starting out in professional life to those looking forward to retirement. Recession Proof, for this blogger at least, transcends a typical readership profile.

This book is not only about financial survival, it’s not only about career security, not just about investment management; rather it’s about all of the above, along with the right dosage of prudence and practical advice from an old industry pro sprinkled in for good measure. Everyone could do with that! 

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo: Front Cover - Recession-Proof: How to Survive and Thrive in an Economic Downturn By Jason Schenker © Lioncrest Publishing 2016

Kuwaiti strikers propping up crude prices

The ongoing Kuwaiti oil strike has cut the country’s output for a fourth successive session, US inventory data overnight was price supportive and Iraq is fanning talk of another oil producers’ meeting in May. 

End result is that Brent is above $45 per barrel but remains vulnerable to a correction. Non-OPEC supply declines have started to bite, but risk premium won’t kick in until excess oil falls below 1 million barrels per day (bpd). Even with ongoing refinery maintenance in certain corners of the world and the Kuwaiti oil strike - which has seen its output plummet to 1.5 million bpd from 2.8 million bpd - there is still plenty of the crude stuff on the market.

Whichever way both Brent and WTI futures go, the $40-50 per barrel range is likely to be maintained, and a drop to $35 per barrel remains a distinct possibility. Meanwhile, an uptick in crude oil futures (and iron ore) is driving forex market trends too with beleaguered commodities linked currencies getting some respite.

Mexican peso, Aussie and Canadian dollars are all up versus the greenback. Kit Juckes, head of forex at Societe Generale, said, "With BHP warning of a near-term correction (downwards) and with output of iron ore soaring, the rally should be treated with a bit of caution, but it's going to go on supporting the Australian dollar for now.

"The oil price rally by contrast has better foundations as the supply/demand imbalance is slowly being resolved and while the upside is limited, confidence that the cycle has turned is growing and that will remain a big FX driver. We're long AUD/NZD and the iron ore bounce should help, and short USD/CAD, EUR/RUB and GBP/NOK, all trades which get help from rising oil prices."

Reverting back to the oil glut story - it has some way to run yet, but for the moment Iran ought to thank Kuwaiti strikers for neutralising the Doha Talks farce. That’s all for the moment folks! Keep reading, keep it crude!

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo: Oil pipeline © Cairn Energy Plc

‘Doh-a Farce’? Brace for $35/bbl Brent?

The Oilholic is rather surprised that some people are actually surprised the Doha talks between major oil producers turned out to be a bit of a farce.

Well, in case you haven’t heard – the overhyped meeting between OPEC and non-OPEC crude producers aimed at introducing a production freeze has ended without an agreement.

Here is one’s take on the development in a Forbes column. The Iranians never turned up in the first place, and the 18 or so oil ministers who did, saw Saudi Oil Minister Ali Al-Naimi insist that there would be no coordinated oil production freeze unless the Iranians came on board. And there you have it – a predictable outcome, without the Saudis giving an inch.

So what’s next? The Oilholic deems a shot term return for Brent futures down to $35 per barrel as highly likely. If it is not achieved intraday today, we should probably get there early this week thereby wiping out some of the froth that built up ahead of the Doha non-event - unless of course breaking news of a Kuwaiti oil strike has the opposite effect. 

At the time of writing this post, both Brent and WTI front month futures contracts are trading down by over 6% and slipping towards the mid-thirties.

And here’s another prediction – one doesn’t expect OPEC to achieve anything at its next meeting in June either. Both Iran and Saudi Arabia are holding firm, and in no mood to compromise – something that is unlikely to change overnight.

Finally, cutting through all the pre and post Doha Talks hullabaloo, the Oilholic has also not altered his market forecasts – of Brent at or just below $50 per barrel by the end of 2016, supply-demand rebalancing by Q1 2017 and a medium term phase of low prices well shy of the mid-2014 highs before the price curve took a turn for the worse. That’s all for the moment folks! Keep reading, keep it crude! 

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo: Oil extraction site in Oman © Shell

Volatile yet flat-ish Q1 points to $40-50/bbl price

The first quarter of 2016 has been pretty volatile for oil benchmarks. Yet if you iron out the relative daily ups and downs in percentage terms, both global benchmarks and the OPEC basket are marginally higher than early January (see chart left, click to enlarge). 

Brent, at $37.28 per barrel back then, ended Friday trading at $41.78, while WTI ended at $39.53, up from $37.04 in early January. That’s a fairly flat outcome following the end of a three-month period, but in line with the Oilholic’s conjecture of an initial slow creep above $40 per barrel by June, followed by yet another crawl up to  $50 per barrel (or thereabout) by Christmas (as the Oilholic opined on Forbes).

Moving on from pricing matters, a new report from GlobalData suggests crude refining capacity is set to increase worldwide from 96.2 million bpd in 2015 to 118.1 million bpd by 2020, registering a total growth of 18.5%.

In line with market expectations, the research and consulting firm agrees that global growth will be led by China and Southeast Asia. A total of $170 billion is expected to be spent in Asia alone to increase capacity by around 9 million bpd over the next four years, GlobalData added.

Matthew Jurecky, Head of Oil & Gas Research at the firm said: “The global refining landscape continues its shift eastwards; 40% of global refining capacity is projected to be in Asia by 2020, up from around 30% in 2010.

“China has led this growth, and is projected to have a 15% share of global crude refining capacity by 2020. This activity is putting pressure on other regional refiners, especially now that China has become a net exporter, and will become a larger one.”

In Europe, growth is expected to occur at a substantially slower rate. Although demand is decreasing and is less competitive, older refineries in Western Europe are being closed, these factors are being countered by investment in geographically advantaged and resource-rich Russia, which sees Europe’s capacity increasing marginally from 21.7 million bpd in 2015 to 22.5 million bpd by 2020.

Away the refining world to the integrated majors, with a few noteworthy ratings actions to report – Moody’s has downgraded Royal Dutch Shell to Aa2 with a negative outlook, Chevron to Aa2 with a stable outlook, Total to Aa3 with a stable outlook and reaffirmed BP at A2 with a positive outlook. 

Separately, Fitch Ratings has affirmed Halliburton at A-, with the oilfield services firm’s outlook revised to negative. That’s all for the moment folks, keep reading, keep it crude! 

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

Beyond a crude April Fool’s joke

There’s still just too much oil around, with physical traders reporting anything between 1.75 to 2.5 million barrels per day (bpd) of excess supply on the market.

Only thing that’s changed is that anecdotes of a 3 million bpd surplus have declined, particularly so in Asia. That is a positive of sorts, but unless excess supply falls to around the 1 million bpd level – geopolitical risk premium won’t kick in like it used to before the glut took hold.

In the backdrop of course, is a Saudi-Iranian spat on the level of each others oil exports that’s extending well beyond a crude April Fool’s day joke. On Thursday, Saudi Deputy Crown Prince Mohammed bin Salman told Bloomberg: “If all countries agree to freeze production, we will be among them.”

He added that Iran needed to be among those countries “without a doubt.” The comments come as Iran has decided not to attend oil producers' talks in Doha on April 17. Tehran has called the idea of such a meeting daft.

In response to the Saudi comments, Iranian oil minister Bijan Zanganeh told the Mehr News agency that the Islamic republic would “continue increasing its oil production” and exports. Meanwhile, a Reuters survey published last week indicated that OPEC’s oil production rose in March, after a period of stability in February, following higher production from Iran and near-record exports from southern Iraq.

Its 4 million bpd-plus output was second only to Saudi Arabia among all of OPEC's 13 member nations. Lest we forget, Russian output remains at Soviet era highs of 10.91 million bpd.

Simple truth of the matter is, the Iranians cannot flood the market and are highly unlikely to match their rhetoric of 1 million bpd, not least because they lack the infrastructure and means to do so in a short period of time, and were they to do so, the resulting price dip would come straight back to haunt them.

The Russians have already said they'll look for “alternative means” to curb a production rise, but not by cancelling new exploration. In any case, they lack the means to ramp up output further. As for the Saudis, who still have spare capacity and are willing to freeze were others to do so, it is purely a case of meeting client demands.

As the Oilholic has noted before, they are producing to a level that meets existing export demand for their longstanding clients. As such, they have no need to ramp up the output levels. So phoney chatter of “will they, won’t they” is purely for market consumption and has little connection with reality when it comes to net volume additions or declines, something which would be dictated by market economics!

As for what this blogger expects would come out of Doha – probably an agreement big on public relations spin than a real-terms cut. For argument sake, even if there is a cut of 1 million bpd, the reprieve would be temporary. Futures would rise over the short-term before the reality of tepid demand and considerable oil held in storage triggers another round of correction. Get used to the $40-50 per barrel range. That’s all for the moment folks, keep reading, keep it crude!

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo: Offshore oil exploration site in India © Cairn Energy.

Preparing for an oil slump away from US pumps

The Oilholic is delighted to be back in lovely San Francisco, California, some 5350 miles west of London town. And what a 'crude' contrast it has been between two visits - when yours truly was last here little less than two years ago, the oil price was in three figures and our American cousins were (again!) bemoaning oil prices at the pump, not all that unaware about even higher prices we pay in Europe.

Not so anymore – for we’re back to under $3 per gallon (that’s 3.785 litres to Europeans). Back in January, CNBC even reported some pumps selling at rock bottom prices of as little as 46 cents per gallon in eastern US; though its doubtful you’ll find that price anywhere in California. 

Nonetheless, the Bay Area’s drivers are smiling a lot more and driving a lot more, though not necessarily honking a lot less in downtown San Francisco. By and large, you might say its happy days all around; that’s unless you run into an oil and gas industry contact. Most traders here are pretty prepared for first annual decline in global oil production since 2009, underpinned by lower US oil production this year.

Ratings agency Moody’s predicts a peak-to-trough decline in US production of at least 1.3 million barrels per day (bpd) that is about to unfold. On a related note, Genscape expects North American inventories to remain at historically high levels for 2016, and production to fall by -581,000 bpd in 2016, and -317,000 bpd in 2017, as surging blended Canadian production is expected to grow at +84,000 bpd year-over-year in 2016.

Most reckon the biggest US shale declines will occur in the Bakken followed by the Eagle Ford, with Permian showing some resilience. Genscape adds that heavy upgrader turnarounds in Spring 2016 will impact near-term US imports from Canada.

All things being even, and despite doubts about China’s take-up of black gold, most Bay Area contacts agree with the Oilholic that we are likely to end 2016 somewhere in the region of $50 per barrel or just under.

As for wider domino effects, job losses within the industry are matter of public record, as are final investment decision delays, capital and operating expenditure cuts that the Oilholic has been written about on more than one occasion in recent times. Here in the Bay Area, it seems technology firms conjuring up back office to E&P software solutions for the oil and gas business are also feeling the pinch.

Chris Wimmer, Vice President and Senior Credit Officer at Moody's, also reckons the effects of persistently low crude oil prices and slowing demand in the commodities sectors are rippling through industrial end markets, weakening growth expectations for the North American manufacturing sector.

Industry conditions are unfavourable for almost half of the 15 manufacturing segments that Moody's rates, with companies exposed to the energy and natural resource sectors at the greatest risk for weakening credit metrics.

As a result, Moody's has lowered its expectations for median industry earnings growth to a decline of 2%-4% in 2016, from its previous forecast for flat to 1% growth this year. "This prolonged period of low oil prices initially affected companies in the oil & gas and mining sectors, but is spreading to peripheral end markets," Wimmer said.

"Slackening demand and cancelled or deferred orders in the commodities sectors will constrain growth for a growing number of end markets as the fallout from commodities weakness and lackluster economic growth expands."

Everyone from Caterpillar to Dover Corp has already warned of lower profits owing to weak equipment sales to customers in the agriculture, mining, and oil and gas end markets. The likelihood of deteriorating performance will continue to increase until the supply and demand of crude oil balance and macroeconomic weakness subsides, Wimmer concluded.

Finally, as the Oilholic prepares to head home, not a single US analyst one has interacted with seems surprised by a Bloomberg report out today confirming the inevitable – that China will surpass the US as the top crude oil importer this year. As domestic shale production sees the US import less, China’s oil imports are seen rising from an average of 6.7 million bpd in 2015 to 7.5 million bpd this year.

And just before one takes your leave, Brent might well be sliding below $40 again but all the talk here of a $20 per barrel oil price seems to have subsided. Well it’s the end of circling the planet over an amazing 20 days! Next stop London Heathrow and back to the grind. That's all from San Francisco folks. Keep reading, keep it ‘crude’! 

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo I: Vintage Tram in Downtown San Francisco. Photo II: Gas prices in Fremont. Photo III: Golden Gate Bridge, San Francisco, California, USA © Gaurav Sharma, March 2016.

Chasing tankers in Beautiful British Columbia

The Oilholic has crossed the international dateline and has gone from being 6000 miles east of London in Tokyo, Japan to being 4700 miles west in "Beautiful British Columbia, Canada" as vehicle registration plates in Vancouver remind you with customary aplomb.

It’s a bit cloudy and tad soggy here, a marked contrast to sunny Tokyo. In between meeting family, friends and contacts, yours truly has also penned two Forbes columns – one on the direction of the South Korean economy and a second one on the oil price bottoming out.

This blogger would say it is all well and good that both global benchmarks – Brent and WTI – are lurking at or just below the $40 per barrel level, and some, including the International Energy Agency, are opining that prices may well have bottomed out. While accepting those sentiments is not difficult, China’s anticipated flat demand could spell trouble over the medium term, as one explained in the latter Forbes post. 

Shipping traffic out of this Canadian province where yours truly is at the moment, typifies the oil and gas world’s dependency on emerging markets in general and Far Eastern economies in particular, led by – who else – but China.

Wherever you admire BC’s amazing shoreline and Vancouver’s beautiful waterfronts – atop Grouse Mountain (above left), Concord Pacific Place in Downtown Vancouver (right), City Harbour inlet (below left), Port Moody or on the other side of the Burrard Inlet from English Bay beach (one's favourite spot) – you cannot miss umpteen oil and gas tankers either waiting to dock or waiting to leave with their crude cargo from the area.

Over the last 12 years on each visit to the area, the Oilholic has only seen the volume of traffic rise exponentially. Unsurprisingly, it causes much consternation among the very strong regional environmentalist groups. Their worst fears were heightened again by the spillage of bunker fuel in April 2015 off West Vancouver’s Sandy Cove.

Prior to that, there have been other incidents, though the most serious one dates back to July 2007 when an excavator working on a sewage line pierced a oil pipeline releasing more than 250,000 litres of crude oil. Nearly 70,000 litres flowed into the Burrard Inlet, with the resulting clear-up costing the province $20 million.

Yet loading and outflow of oil (and gas) from British Columbia, a province which has very little of its own and serves mainly as a transit point, to the Far East is only going to increase not decrease. In the last election, Canada’s new carbon footprint conscious Prime Minister Justin Trudeau’s Liberals bagged 17 of 42 seats in the province; their best result since 1968.

Some, to quote a retired civil servant and old contact, can be described as “tree huggers”, which is not necessarily a bad thing and there are plenty of trees to hug in BC. Tree huggers or not, Trudeau promptly appointed three of his MPs from BC to his cabinet. 

But with the Canadian economy going through a lacklustre patch, oil markets grappling with oversupply and China expected to buy less, the stakes are going to get higher even if the Western Canadian Select – which trades at a discount (currently above US$14) to the West Texas Intermediate – goes lower. Quite frankly, there is very little the carbon conscious PM can do here.

Furthermore, if anecdotal evidence is to be believed, BC Premier Christy Clark and her provincial Liberals were actually banking on an oil and gas boom in time for a 2017 regional election, eyeing both jobs and revenue.

Instead they, along with much of the oil and gas world, now have a complicated and prolonged bust on their hands, with the general direction of Canadian oil dispatches more than likely to be Eastwards, even if the US remains Canada’s largest trading partner for oil and much else. Just ask neighbouring Alberta; the politics (and economics) of it all is likely to get much more complicated! 

However, given lower demand from both Japan and China, it is quite likely that you might spot marginally fewer tankers in British Columbian waters. The Oilholic does stress on the word ‘marginally’ though, and that won't satisfy the tree huggers. That’s all for the moment from Vancouver folks! Next stop San Francisco, California, USA via short stopover in Phoenix, Arizona. Keep reading, keep it ‘crude’! 

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo I: View of Vancouver from Grouse Mountain, North Vancouver, Photo II: Concord Pacific Place, Downtown Vancouver, Photo III: City Harbour inlet, Vancouver, British Columbia, Canada © Gaurav Sharma, March 2016.

Why Ginza’s bullion traders love BoJ these days

Just happens to be a coincidence that the Oilholic is in Tokyo to witness the conclusion of the Bank of Japan’s two-day monetary policy meeting. There were no major surprises, as Governor Haruhiko Kuroda and his board left the country’s benchmark interest rate unchanged at -0.1% in line with market expectations.

The BoJ remains well below its 2% inflation target, headline economic growth is stagnant, exports are flat and well the Oilholic can personally testify that the yen, a preferred carry trade currency, is soaring making life for overseas visitors all that pricier! The pound sterling was lurking around JPY150 level, while the dollar fell below JPY113.50 following the BoJ’s decision which greeted the market on Tuesday.

Most analysts here think further economic stimulus both from the BoJ as well as the Shinzo Abe administration is all but inevitable, with Governor Kuroda noting: “Japan’s economy has continued its moderate recovery trend.”

Moderate, quite simply might not be enough for most Japanese people, hence the weighting in favour of stimulus is rising. However, not everyone is unhappy about the central bank’s policy stance – gold bullion traders are among those with beaming smiles.

According to Tanaka Kikinzoku Kogyo (KK) store in Tokyo’s Ginza district, cited by Bloomberg, the price of gold bars rose to JPY5027 (£31.14, $44.30) per gram on March 11; that’s the highest since July last year.

“Many customers are wagering that it is better to turn their savings to gold as a safe asset rather than deposit money at banks that offer low interest rates,” a spokesperson for the store told the newswire.

The said interest was going strong even at prices exceeding and staying steady above JPY5000 per gram as the Oilholic prepared to leave Tokyo on Friday with cherry blossoms (or “sakura”) having bloomed a few weeks early on the sidewalks and parks not far from the City's historic bullion district and destination for upmarket shopping.

That’s all from Japan folks as the far eastern adventure comes to an end, and a North American one is about to begin. Next stop Vancouver, British Columbia, Canada! Keep reading, keep it ‘crude’!

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo: Bank of Japan, Tokyo © Gaurav Sharma, March 2016.

Japan’s return to Iranian market ‘complicated’

The Oilholic is back in Tokyo, some 6,000 miles east of London, and is finding Japan Inc. rather content with a crude oil buyers’ market. In fact, if anything, even the relatively higher oil price, has fallen to a third of the level this blogger noted when he was last here (in September 2014).

One outstanding issue – of re-establishing ties with the Iranian market – remains ‘complicated’ to quote analysts and legal professionals in the Japanese capital. Up until 2006, the point of the first wave of stringent UN sanctions on Iran against its nuclear programme, Tokyo enjoyed good ties with Tehran, symbolised first among other things by its stake in the Islamic republic’s Azadegan oilfield. 

However, that was then, and by 2010 matters progressively worsened as the US and European Union moved to impose yet more stringent sanctions on Iran following an escalation of Tehran’s nuclear ambitions, and the West’s wariness of it. 

Subsequently, Japan duly shunned Iran in wake of international sanctions, even if it wasn’t easy for the largest liquefied natural gas importer and third-largest net importer of crude oil and oil products in the world to do so. Following Iran’s return to the international fold and a lifting of international sanctions, unsurprisingly Japan’s government was among the first to follow China in resuming ties with the country’s oil and gas sector, and the wider economy. 

In February, a framework was also put in place under which Tehran would guarantee $10 billion in investment projects financed by the coveted Japan Bank for International Cooperation (JBIC) and insured by Nippon Export and Investment finance. There’s one nagging problem though – the US is yet to fully lift its sanctions on Tehran and that makes Japanese banks, heavily intertwined with American financial system, wary of participating.

Unless commercial banks participate and capital flow mechanisms are established, JBIC cannot finance a project. And in any case an international remittance system needs to work, and major commercial banks, not just Japanese ones, need to resume normal operation before things can get off the ground. Not much of that has happened. 

Experts at law firm Baker & McKenzie’s Tokyo office say the appetite for investment in Iran is definitely there, yet very few Japanese companies have actually signed deals on account of risk associated with falling foul of US sanctions. 

Of course, leading law firms are ever willing to conduct due diligence to protect their clients’ foray into Iran. Furthermore, Washington has lifted sanctions on non-US banks, but nothing is quite so straightforward.

Partial US sanctions require anyone international banks deal with in Iran is not on the US Treasury’s “Specially Designated Nationals” (SDN) roster. The sanctions also cover any company that’s 50% or over 50% owned by an entity or person blocked by the US State Department, even if the company in question is not on the Treasury Department’s SDN roster. 

The only ‘crude’ saving grace is that a stagnant Japanese economy’s demand for oil is at its lowest since 1988, while glut troubled suppliers are queuing up twice over to sell their cargo at discounted prices. Given current oil and gas market permutations, the headache is as much Iran’s to contend with. That’s all from Tokyo for the moment folks. Keep reading, keep it ‘crude’! 

To follow The Oilholic on Twitter click here.
To follow The Oilholic on Google+ click here.
To follow The Oilholic on Forbes click here.
To email: gaurav.sharma@oilholicssynonymous.com

© Gaurav Sharma 2016. Photo: Tokyo Skyline from Sumida River ferry, Tokyo, Japan © Gaurav Sharma, March 2016.