The United States and the European Union are getting ready to implement sanctions on Iran. The goal is to get that country’s leaders to abandon their nuclear ambitions.
Do you want to guess who will reap the benefits of these policies? For starters, China.
According to Reuters, Iran’s oil production won’t be curtailed. Thanks to China’s growing demand for oil, Iranian production will remain steady once the European Union’s embargo goes into effect this summer.
And, in addition to picking up the slack, China might actually pay a lower price for Iranian oil because of this lack of competition:
Iran will continue to sell much the same volume of oil – 2.6 million barrels per day or around 3 percent of world supply – but almost all of it will flow to China, they reason. And being pretty much Iran’s only remaining customer, Beijing will be able to negotiate a much reduced price.
Another big winner in this game of petro politics? Russia.
The world’s biggest oil producer [Russia] is well positioned to raise its market share in Europe, despite misgivings among some Europeans about relying too heavily on Russia for oil and gas. Payment disputes between Russia and neighboring Ukraine have in the past threatened transit gas supplies to Europe.
“I’m sure Moscow is watching the situation with big interest,” said José Sergio Gabrielli, chief executive of Brazil’s Petrobras. Arkady Dvorkovich, the Kremlin’s top economic aide, concurred that Russia stood to benefit from sanctions that were guaranteed to keep oil prices at least at current levels around $100 a barrel by his reckoning.
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