as a recipient of its oil products. The answer is that, basically, the effect would not be unduly adverse. With the worsening of the political situation in Iran, Shell has made every effort to diversify its sources of oil supply and to reduce its dependence on Iran. If Iran requested that its oil should not be sent from the Shell refinery at Singapore to Hong Kong, Shell would comply with the request but should still be able to supply Hong Kong adequately by juggling between oil sources and destinations.
6
Apart from the oil brought in by Shell, there are other cargoes of oil brought directly from Iran to Hong Kong by smaller oil companies apparently almost entirely as "spot" purchases. It is such cargoes that account for the figures in paragraph 3 which show Iran increasing its share of the Hong Kong market from less than 6% in 1978 to 8.1% by quantity and 10.40% by value in 1979. The Managing Director of Shell, Hong Kong, speaking in his capacity as an individual well acquainted with the local oil trade, estimates that the loss of these directly imported cargoes would have little impact on Hong Kong. His assessment is that the relatively high percentage of supplies coming directly from Iran in 1979 was partly due to Japan (which has been a major purchaser from Iran) selling off oil products which she did not require but was forced to take under purchase arrangements with Iran.
B, C
7
The overall conclusion, therefore, is that the loss of Iran's oil to Hong Kong would not be an intolerable blow and the effects could be borne with out hardship for a period of at least several months. The present position in the Western world is that oil supply is not unduly difficult, owing to a general dampening of demand and to countries' stockpiling arrangements, Obviously, however, if the political situation in the Gulf area deteriorated further with perhaps an intensification of Iran/Iraq border conflict, the oil supply situation could become serious. Such a situation would of course affect the whole world not Hong Kong alone and would not be a direct result of any political and diplomatic measures taken by Hong Kong against Iran.
Iran as a trading partner
(a)
8
Visible trade with Iran
Detailed figures on trade with Iran are given in the tables at Annexes B and C. In 1979, about 0.3% of Hong Kong's total domestic exports went to Iran. Principal. export items were watches and clocks (representing 24.1% of Hong Kong's domestic exports to Iran), household equipment of base metal (11.0%), musical instruments and parts (10.1%), sanitary, plumbing, heating and lighting fixtures and fittings (8.8%), and radio-broadcast receivers (7.0%). Also, about 0.3% of Hong Kong's re-exports went to Iran in 1979. Major items were watches and clocks (representing 73% of Hong Kong's re-exports to Iran), pearls, precious and semi-precious stones (5%), and medicinal and pharmaceutical products (4%).
G.S. 166
No comments yet.
Private notes are available after approval.