Every year, August has been a time to reduce exports of petroleum products
The trading volume of the International Ring of the Energy Exchange in August was accompanied by a 30% decrease, which means a serious decrease in foreign exchange through the export of petroleum products from the country. They are not related to each other or have high affinities for various reasons.
In August, the volume of supply of hydrocarbon products in the physical trading board of the energy exchange decreased by one million tons and reached 3 million and 508 thousand tons, which is still an acceptable figure, but despite the decline of one million tons of supply can not be easily It passed even when the demand also dropped by nearly one million tons.
*** Possibilities of reducing the supply of petroleum products
There are various hypotheses that can be used to justify this reduction in supply. The main possibility is related to the increase in domestic consumption, which can be considered an economic stimulus for domestic ring trading on the energy exchange. At the beginning of the year, when most manufacturing and non-productive businesses and activities in the country were closed or semi-closed, the level of demand for general goods decreased significantly. The market for hydrocarbon products also escaped this threat, and the domestic ring as well as the international ring were affected by transportation restrictions and border closures.
But in recent months, when the country’s policy is based on compliance with health protocols, domestic consumption tends to increase rapidly to even offset the decline in consumption at the beginning of the year. Although in these circumstances, a significant recession has overshadowed the general industry, but the growth of domestic consumption can not be denied compared to the first months of the year. Therefore, feeding the needs of the domestic market has been done in a way other than the energy exchange and has caused the supply to decrease by one million tons.
*** Demand decline due to reduced supply
The amount of demand registered in August for the products offered in the physical board of the Energy Exchange, although attractive, has experienced a decrease compared to July. The decrease in demand is considered natural because it is created against the decrease in the volume of supply. Meanwhile, one million and 326 thousand tons of the supply of hydrocarbon products have been traded in August. Demand was 1.947 million tons in July, which reached 1.5 million tons in August, showing a balanced decline. Another data that adds to the complexity of the August trading analysis is the ratio of supply to supply.
In July, 28.16% of the offers were traded, which is a decrease in August. The main reason for the decline in trading volume in the energy exchange is the amount of demand, which is at its lowest level since February last year. In any case, the volume of supply of hydrocarbon products in the energy exchange has been recorded at 3,570 tons, which is nearly one million tons less than the previous month. The result of all this was that the rial value of energy exchange transactions, which had an upward trend over the past four months, changed phase and reached 91,000 billion rials, which indicates a decrease of 18.65% compared to last month.
*** International Energy Exchange Ring
The confrontation of supply and demand in the international ring in August caused one million and 326 thousand tons of various hydrocarbon products to be traded this month, which resulted in a 30% decrease compared to July. More precisely, the volume of transactions in the international energy exchange market in July was close to 1,900,000 tons, which decreased to 1,326,000 tons in August. This rate of decline in exports should be considered one of the most important events in this market, which can be considered a direct effect on the decline in the country’s foreign exchange exports of petroleum products.
In the same month, however, gasoline exports reached 184,000 tons, which is a balanced figure for the hot days of the year, but the growth potential of this amount can be clearly traced in the coming months. The value of energy exchange export ring transactions in August was close to 88,000 billion rials, which indicates a decrease of 14% compared to the previous month, ie July. Since Iran’s energy exchange is export-oriented, one of the drivers of declining trading volume is export restrictions. But it must be borne in mind that, as in the past, even if the difficult export conditions are true, our ability to find ways in which we can maintain our independence in various ways and thus engage in international trade is of great importance.
*** Concluding remarks
As in the petrochemical industry, despite the many sanctions, the domestic market for petrochemical products is still attractive for both buying and investing, and the desire of our business partners to trade and bring their capital to Iran has always been prominent.
In the field of transactions related to hydrocarbon products that are of acceptable quality and have a high competitiveness with other countries, there is a possibility of competition. As in the previous months, especially in June, the experience of significant growth of export gasoline transactions was recorded in the record of the Energy Exchange.
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