The drop in China’s oil demand reduces Iran’s oil revenues

According to Energy Press, in its latest monthly report, OPEC has revised the forecast for the growth of global demand for oil in 2024 and has provided a lower estimate. Citing weaker-than-expected Chinese demand in the first half of this year and weaker expectations for China, the group revised down its expectations for demand growth next year.
OPEC now expects global oil demand to grow by 2.11 million barrels per day in 2024, down from the 2.25 million barrels per day growth estimated in the group’s previous report.
The OPEC report states: This revision reflects the actual data received for the first quarter of 2024 and in some cases for the second quarter, as well as a reduction in expectations for China’s oil demand growth in 2024. Despite a weak start to the summer driving season compared to last year, transportation fuel demand is expected to remain strong due to favorable road and air traffic.
Earlier, Goldman Sachs, which is a world-renowned institution, predicted that the recession in the American economy could reduce the price of oil. In addition, the International Energy Agency, which represents industrialized countries, has predicted the growth of demand for oil this year by 970,000 barrels per day. All of these forecasts can reduce Iran’s oil revenues in the second half of this year, and for the 14th government that is about to be formed and faces a budget deficit of 450,000 billion tomans, this event means increasing budget pressures on the government.
Recession in China equates to a decrease in Iran’s oil revenues
Mahmoud Khaqani, an expert on international energy issues, said in an interview with “Jahansanat”: The decrease in China’s oil purchase demand is highly discussed these days. First, we have to see what is the state of the oil market; The oil market is affected by the Middle East crisis. From that point of view, the attack of Ukraine with the help of America and Western Europe on a part of Russian territory and occupying about 40 to 50 kilometers of this country’s territory is discussed. Although it could not have an effective impact on the oil market, the crises persist. Stating that what has caused the oil demand to drop is the stagnation of the Chinese economy, he said: “An important reason why the Chinese economy has not grown as expected is because most of China’s exports are made to the American market.” America is not in a good condition and is in a condition of recession and inflation. In the old days, there was a saying about the economy that if the American economy sneezes, the economy of the rest of the world will catch a cold. Now the American economy is facing trillions of dollars in debt.
Although the amount of production of crude oil and unconventional natural gas in the United States has increased, so that the United States has become a major exporter of crude oil and liquefied natural gas (LNG), but the published reports show two important facts; First, in late 2017, with the pseudo-coup that took place in the Arabian Peninsula and put Bin Salman in power, and almost the oil and gas of the Middle East came under the control of the United States, the Trump administration tried to save the dollar of oil and gas resources of the United States and the Middle East as a support for Some energy experts believe that America has succeeded in this.
He further said: By examining the parity rate of the US dollar with other currencies and fluctuations in the price of oil and natural gas in the market, it is clear that a connection has been established between the dollar and hydrocarbon resources. If the recession in America continues, it will affect all countries in the world, including China. On the other hand, China is our only exclusive customer that determines both the price and the volume of exports. If China’s demand decreases, it will affect our economy.
Unknown foreign policy
Stating that the 14th government came into office in a situation where the world’s major economies are going into recession, Khaqani pointed out that Mr. Mezikian has promised to return to the negotiating table and said that he wants to interact with the world and normalize Iran’s banking relations with the world. slow Naturally, if this happens, part of Iran’s problems in trade with the world will be solved.
This energy expert stated that once Iran used to sell oil for $9 per barrel, but banking relations with the world were established, he said: At that time, despite the fact that the oil income was low, but because a large part of the country’s oil income was not lost in the way of circumventing the sanctions, The drop in oil prices was not a concern. On the other hand, the trust between the people and the government was at a level where the people believed and cooperated with any problem the government expressed. Today, considering that 51% of the people did not vote for Mr. Medeshkian, it is unlikely that they still believe what Mr. Medeshkian and his ministers say is true.