US bullying won't resolve supply shortage in oil market: Zanganeh

Ivan Schwartz
October 18, 2018

The steadily rising tensions between the US and Saudi Arabia over the disappearance of dissident journalist Jamal Khashoggi and the possibility of the Saudis reducing crude output in retaliation - which in turn would exacerbate a market already struggling to cope with shortfall from Iran - caused crude prices on Tuesday to rise again, albeit modestly.

U.S. West Texas Intermediate crude was 72.17 dollars a barrel on Wednesday while Brent crude was, 81.77 dollars a barrel.

Reiterating India's stand, Pradhan told reporters here on the sidelines of the 3rd India Energy Forum that the current surge in global crude oil prices was more a result of the market sentiments being hit by geo-political factors which includes Iran and said there were no issues of availability.

U.S. President Donald Trump is intimidating others to cut oil prices while the world is facing a shortage of crude supplies.

Fears over oil supply were exacerbated late Tuesday by figures from the American Petroleum Institute showing an unexpected 2.1-million-barrel decrease in USA crude stocks last week.

Iranian Oil Minister Bijan Namdar Zanganeh said that the market is facing reduction in supply and no producer is able to make up for the loss. US light crude was 40 cents lower at $71.38.

Oil had been rising on worries about Iranian sanctions and tensions between the United States and Saudi Arabia after the death of Saudi journalist Jamal Khashoggi.

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"If you combine the impact of US sanctions on Iran and the USA trade war with China, it is Trump's foreign policy which is reshaping oil flows", said Olivier Jakob, managing director of consultancy Petromatrix.

Some sanctions took effect from August 6, while those affecting the oil and banking sectors will start from November 4.

Saudi Arabia said it would retaliate to any action against it over the Khashoggi case, state news agency SPA reported on Sunday, quoting an official source. "This would be so destabilizing for global markets that it would make the current trade tensions between the US and China look like a game of Axis & Allies".

MRPL would look at buying Iraqi oil to replace Iranian oil, he said, adding that the company has already made some payments in rupees to Iran for oil.

Oman was the talk of one of the oil market's biggest gatherings last month, as its crude surged past $90 a barrel. They also expect to see declines in stockpiles of gasoline by 1.52 million barrels and distillates by 1.5 million barrels.

India's oil demand is expected to rise by 5.8 million barrels per day (bpd) by 2040, accounting for about 40% of the overall increase in global demand during the period, OPEC's secretary general said on during the weekend. There's an urgent global need to find replacement barrels for Iran's, whose exports might just collapse next month.

Other reports by GizPress

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