India & China to continue buying Iranian oil: IHS

Oil prices have been moving upwards quite sharply due to increased and additional tightening of sanctions on Iran, though Simon Wardell of IHS does not anticipate a conflict at this stage.

With Europe and Japan cutting off their take on Iranian crude, he does not think that the US will expect India and China to do the same because of the constant struggle for oil in these regions. The Iranian oil will find some market in the South East Asian markets. Though Saudi has promised to make up for the Iranian oil, there is less in the tag, there is less spare capacity and that is always a concern to oil markets. Wardell feels that it is going to be a fairly high price environment for this year at least and probably into the first half of next year. Below is an edited transcript of his interview. Also watch the accompanying video. Q: When you look at the price levels for Brent and WTI, do you think these prices have factored in a potential military strike against Iran and an escalation in tensions by that? A: Since the beginning of the year prices are moving upwards pretty sharply as a result of what has been happening with the increased sanctions on Iran and the additional tightening of sanctions on Iran and the prospect of some possible disruptions from the region. So I think a lot of that is actually already been priced in to the market. At a USD 120-125 a barrel for Brent which is where we are right now the market is not suggesting that we are going to get a very serious conflict in the Middle East. If we did, I think we