Adding Iranian oil back to the market will lower prices everywhere, including Russia. I'm not so sure the extra-heavy Venezuelan oil will be affected as much.
India used to use Venezuelan crude before the 2019 sanctions [0][1]
India only shifted to using Russian oil in 2022 [2] after Venezuelan [3] and Iranian [4] oil sanctions were enacted, which was when both began increasing engagement with China.
It's a similar story for South Korea [5] and Japan [6].
This helps reduce prices for ONG, as India is shifting back to Venezuelan crude which gives slack which South Korea and Japan can take advantage of, as India, Japan, and South Korea represent 3 of the 5 largest oil consumers globally.
Reminder: extra heavy oil means that there is more processing required to get useful materials out of it, which in turn becomes higher operational cost. So, if Iranian oil entered the market, prices would go down making Venezuelan oil non competitive (I believe the break even price for Venezuelan oil was close to 80$). At this moment the numbers don't add up to make companies go back into Venezuela given the price, uncertainty and past expiriences.
Adding Iranian oil back to the market will lower prices everywhere, including Russia. I'm not so sure the extra-heavy Venezuelan oil will be affected as much.
Anyone know?
India used to use Venezuelan crude before the 2019 sanctions [0][1]
India only shifted to using Russian oil in 2022 [2] after Venezuelan [3] and Iranian [4] oil sanctions were enacted, which was when both began increasing engagement with China.
It's a similar story for South Korea [5] and Japan [6].
This helps reduce prices for ONG, as India is shifting back to Venezuelan crude which gives slack which South Korea and Japan can take advantage of, as India, Japan, and South Korea represent 3 of the 5 largest oil consumers globally.
[0] - https://www.thehindu.com/business/Industry/ongc-awaits-instr...
[1] - https://www.thehindu.com/business/Industry/reliance-venezuel...
[2] - https://www.bbc.com/news/business-65553920
[3] - https://www.wilsoncenter.org/article/india-and-venezuela-gro...
[4] - https://www.brookings.edu/articles/trump-tightens-sanctions-...
[5] - https://eastasiaforum.org/2019/09/13/south-korean-oil-refine...
[6] - https://mei.edu/ar/publication/japan-and-middle-east-navigat...
Reminder: extra heavy oil means that there is more processing required to get useful materials out of it, which in turn becomes higher operational cost. So, if Iranian oil entered the market, prices would go down making Venezuelan oil non competitive (I believe the break even price for Venezuelan oil was close to 80$). At this moment the numbers don't add up to make companies go back into Venezuela given the price, uncertainty and past expiriences.