LONDON, June 21 (IranMania) – A top oil industry official said that crude from the Caspian Sea which is at present being exported to several Mediterranean and western countries is not competing to capture markets dominated by oil produced by Persian Gulf littoral states, including Iran.
National Iranian Oil Company’s director for international affairs, Hojatollah Ghanimifard told Fars news agency on Monday that although Caspian oil can to some extent substitute Persian Gulf crude, however, growing demand is likely to cause supply shortage in the long run.
Oil prices surged above $58 a barrel on Friday, sustaining a rally built on strong demand for gasoline and diesel and on doubts about refiners’ ability to keep up.
After climbing to a high of $58.60 per barrel, light sweet crude for July delivery settled at $58.47, an increase of $1.89 on the New York Mercantile Exchange. That topped the exchange’s previous intraday high of $58.28 set on April 4 and exceeded the previous closing high of $57.27, set April 1.
Global oil demand is now estimated to stand at slightly above 82 million barrels a day.
Elsewhere in his remarks, Ghanimifard said the type of crude extracted from Azeri and Kankoul oilfields in the Caspian Seas is different from that produced in the Persian Gulf, ruling out the threat of competition.
“Transferring oil to export destinations either on the basis of swap deals or direct transportation can be impacted both by market conditions and the price variations, a condition known as arbitrage based on which if the price of the same type of crude differs in two markets, suppliers will turn to the more expensive-selling areas,” he noted.