US Pushing for ‘Calibrated’ Approach on Zero Iran Oil Exports

10 November, 2018, 11:56 | Author: Frank Williams
  • Crude Oil

The sanctions waivers have further eased concerns the oil market will swing into a deficit of crude supplies.

Benchmark U.S. crude oil fell 1.6 percent to $60.67 a barrel in NY.

Front-month Brent crude oil futures were at $70.69 a barrel, 4 cents above their last close.

"We have seen the USA notification, including India in the list of countries, granted significant reduction exemption for the continued purchase of Iranian crude oil without attracting United States sanctions, " External Affairs Ministry spokesperson Raveesh Kumar said at a media briefing.

"A slowdown in the global economy remains the key downside risk to oil", Bernstein said. Washington has granted 180-day exemptions to eight importers - China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey.

Asked if the administration had a target in reducing Iranian oil exports in the next six months, Hook said, "I can't tell you what our target is; we do have a target". To put that in context, the BP Statistical Review of World Energy 2018 puts global daily crude production at 92.6 million barrels per day for past year, so the increase is meaningful. The drop marks a stunning reversal from last month, when oil prices hit almost four-year highs as the market braced for potential shortages once US sanctions on Iran, OPEC's third biggest oil producer, snapped back into place.

USA crude stocks climbed by 7.8 million barrels in the week ending November 2 to 432 million, data from the American Petroleum Institute showed on Tuesday.

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Most ships arrived in the last 30 days, shipping data showed, as Iran tried to get as much crude as possible into markets before the sanctions took effect. "We have worked with the Saudis, the Emiratis, and other producers to make sure production is up so that historic buyers of Iranian oil are not disadvantaged", he added.

The United States is now the world's biggest crude oil producer, pushing Russian Federation and Saudi Arabia to the back seat.

Meanwhile, Opec's production in October reached the highest level since 2016, and Russian Federation hiked its output last month to a post-Soviet record of 11.4 million barrels a day.

For the first time, just three producers - the US, Russia and Saudi Arabia - now account for a third of global oil production and both the latter two have, like the US, been increasing production.

That is likely to play out in the form of weaker demand for oil.

The steep drop comes one week after major oil companies such as Exxon and Chevron reported surging earnings based, in part, on crude prices that were hitting four-year highs. "Opec and Russian Federation may use cuts to support US$70 per barrel", said Ole Hansen, head of commodity strategy at Saxo Bank.

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