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Watch: Platts Market Movers Asia Jan 25-29: Asian oil markets await US signals

* Japan's 2021 crude oil imports seen falling 5-10%
* US President Joe Biden's next steps on Iran, Venezuela sanctions in focus
* JKM closes below $9/MMbtu as LNG cargo shortage eases
* China's domestic thermal coal prices set to ease as demand slows
View Full Transcript
This week: Oil markets await clarity on sanctions from the Biden administration, LNG prices cool down as temperatures improve in North Asia, and Chinese seaborne thermal coal demand expected to dip ahead of the Lunar New Year holidays.
But first, a grim outlook on crude imports and pandemic-related developments in countries such as Japan and China will keep the market on tenterhooks this week.
The Petroleum Association of Japan expects the country's crude oil imports are likely to drop 5-10% this year. This highlights Japan's difficulty in increasing its crude oil imports without a meaningful recovery from the pandemic, which has slashed its domestic demand for transport fuels.
In China, markets will be closely watching moves by Beijing as the country sees a resurgence in cases, which could also dampen demand for transport fuels. The Chinese government has called for citizens not to travel during the coming Lunar New Year holidays, when transport fuel demand generally picks up.
Meanwhile, Asian oil markets will be closely watching for clearer signals from new US President Joe Biden's next steps on Iran and Venezuela sanctions. Any sanctions relief could unleash crude volumes that would complicate OPEC's efforts to rebalance the market amid a still fragile global recovery from the pandemic.
Sanctions relief is also expected to bring back competition in the Asian markets that have seen oil from Iran and Venezuela slowing to a trickle, while other suppliers like the US, Iraq and the UAE have increased sales to certain Asian markets. S&P Global Platts Analytics forecasts that Iranian crude supply could grow 500,000 b/d between June and December, assuming a new agreement is forged by late 2021, and that the Biden administration is not as stringent about policing sanctions enforcement as the Trump administration.
So for our social media question this week: Will the Biden administration be more stringent in policing sanctions than the Trump administration? Share your thoughts on our various social media platforms with the hashtag PlattsMM.
In Asian LNG, March delivery prices have fallen, with the JKM closing last week below $9/MMbtu as cargo shortages seen in February have eased, as you can see here. The outlook for winter temperatures in March has also improved. Indian LNG aggregators returned to the spot market, seeking February-March cargoes during the week of Jan. 23, attracted by the price correction for March delivery and to meet pent-up demand.
The front-month West India Marker, the Platts LNG benchmark for spot cargoes into India and the Middle East, dropped from an all-time high of $23/MMBtu on Jan. 12 to $8.875/MMBtu on Jan. 22.
Still on a warmer note, Chinese domestic thermal coal prices are expected to fall further as demand from the country's utilities is slowing. However, rains and loading delays across Indonesia may cushion the decline in Indonesian seaborne prices.
And finally in metals, squeezed steel margins may result in some pushback on imported iron ore prices this week, and steel prices may soften slightly as trading activity winds down ahead of the holidays.
Thanks for kicking off your Monday with us. Stay safe and have a great week ahead!