Oil prices steady after pull-back, up on the week

Ivan Schwartz
September 17, 2018

The official admitted that Iranian oil exports would drop, but reiterated Iran's position that the USA sanctions would not succeed in cutting off all of the country's oil sales.

But Iran's OPEC governor Hossein Kazempour Ardebili, said in comments to Reuters that a "supply shortage" meant that the United States would not be able to meet its zero export target.

Petromatrix said in a research note that "There has been a lot of speculative interest searching for Brent above $80.00 a barrel on the back of the US sanctions on buyers of Iranian crude oil, but so far this year any buying of Brent above $79.00 barrel did not have a long shelf life".

Iran, which is facing sanctions by the United States, saw its August production falling by 120,000 barrels per day.

President Trump withdrew Washington in May from the landmark Iran nuclear agreement, officially known as the Joint Comprehensive Plan of Action (JCPOA) reached between Iran and the P5+1 group of countries in 2015, and made a decision to re-impose unilateral sanctions against Tehran.

Washington reimposed some of the financial sanctions from August 6, while those affecting Iran's petroleum sector will come into force from November 4.

Prices began to retreat on Thursday after the International Energy Agency that said global oil supply hit a record high in August despite lower production from Iran and Venezuela.

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Iran's Ardebili accused Saudi Arabia and Russian Federation of taking the market "hostage" through increased production and said that OPEC's responsibility is to restore market balance, not to boycott its founding members.

Iran's OPEC governor, Hossein Kazempour Ardebili, has accused fellow OPEC country Saudi Arabia and non-OPEC country Russian Federation of taking the global oil market hostage.

Oil processors in South Korea, Iran's top customer for South Pars condensate, halted Iranian oil liftings in July as banks, insurance and shipping companies wound down business related to Iran before USA sanctions the country's petroleum sector kick in on November 4. "But we have been more bullish than most in terms of how much we are going to lose from Iran and we believe we are going to lose 1.5-1.8 million barrels per day", Sen added.

Washington's withdrawal from the landmark Iran nuclear deal was criticized across the world. The 15-member OPEC (The Organisation of the Petroleum Exporting Countries) cartel pumped 32.98 million barrels per day last month.

While OPEC production has increased since then, Saudi Arabia has added less crude than it initially indicated.

Despite the supply-side risks posed by Venezuela and Iran, however, spare capacity in Saudi Arabia and Iraq, coupled with potential output recovery in Libya and Nigeria, could help balance the market.

Other reports by GizPress

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