The first cargo of Iranian oil since the lifting of sanctions will be arriving in Poland soon as the major OPEC producer continues to claw back market share around the world.
The cargo of two million barrels of Iranian oil on board a Very Large Crude Carrier (VLCC) is about to arrive in the Polish port of Gdansk on Sunday, a report said.
Since the lifting of sanctions in January, Iran has been working to make a bolder mark on the European market which slipped through its fingers due to the embargo in 2012.
The country is currently competing with other Middle Eastern producers, including Saudi Arabia, which have boosted supplies to the Baltic Sea at the expense of Russian oil.
The kingdom which started shipping crude oil to Poland at the end of September 2015 has been increasing the volume and range of its exported crude grades since then.
Saudi Arabia is believed to be waging an insidious war against both Iran and Russia through inundating the market with oil which has led to a price crash.
Poland, meanwhile, has been working to reduce its dependence on Russian oil imports as Moscow’s tensions with the West have stoked increased energy security fears.
Poland’s Grupa Lotos bought 2 million barrels of crude from Iran in a one-off purchase in late June, said director for international affairs at National Iranian Oil Company (NIOC) Mohsen Qamsari who did not rule out conclusion of long-term deals.
According to Reuters, the anticipated arrival of Iranian oil has prompted a key seller of Russian oil to redirect Urals crude to Asia.
Trader Mercuria, it said, was closing down and emptying Russian oil out of its tanks in Gdansk. The company planned to use the tanker bringing in Iranian oil to transport out its unsold Urals, it added.
Western energy companies such as Petroineos, Shell and Total have leased tanks in Gdansk which increased its oil storage capacity from 300,000 to 677,000 cubic meters earlier this year.
Russian companies, however, still control a major share of the oil market in Poland through pipeline supplies and have signed direct long-term contracts with refiners.
Rosneft head Igor Sechin, quoted by Reuters, said Russia intends to fight for its share on the European oil market with “flexibility and ingenuity,” even if it means increased discounts for Urals.
Russian companies are facing bold inroads from new suppliers. According to Reuters, ten tankers unloaded in Gdansk in July included six shipments with oil brands other than Urals. They included Arab and Iraqi Kurdistan and Iranian brands as well as some unusual purchases like African crude or Azeri ligh.
Iran’s focus, however, is on the Asian market. According to new statistics, India’s crude oil imports of 461,000 barrels per day from Iran hit record levels in July.
The imports were the highest in the last seven years amid the rise in India’s refinery demand that led to the rise in crude oil imports from Iran.