United States crude oil inventories increase last week: API

Pauline Gross
November 9, 2018

The sanctions are aimed to hit not just Iran's energy sector but also its financial, shipping, and shipbuilding sectors.

The committee is due to hold a meeting next week in Abu Dhabi, the capital of the United Arab Emirates, an ally of Iran's regional rival Saudi Arabia.

We have EIA report today at 14:30 (GMT).

In May, US President Donald Trump withdrew from the Joint Plan of Action (JPOA), an global nuclear deal clinched between Tehran and a broad alliance of world powers. None of the other partners agree with USA decision.

But they may not be happy if crude prices continue to weaken.

India is the second largest recepient of oil from Iran after China.

The move by the Donald Trump administration is considered as an endorsement by Washington of India's major role in the development of the port on the Gulf of Oman, which is of vast strategic importance for the reconstruction of war-torn Afghanistan.

But that will probably depend on what happens to the volume of Iranian imports.

Waivers, however, were granted to eight major importers to continue buying Iranian petroleum products without penalty for another six months. Dark days await the US administration.

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India has "demonstrated" significant reductions in its crude oil imports from Iran. OPEC oil shipments will rise by 670,000 barrels a day to 25.79 million barrels a day in the four weeks to November 24 versus the period to October 27, according to data from tanker tracker Oil Movements.

According to Refinitiv Eikon data, Iranian crude exports have fallen to 1 million bpd so far in November.

President Trump has made it clear that they have not demanded zero oil imports from Iran at one go as this would have led to "oil shock".

Iran's oil exports rose sharply after the previous round of sanctions were lifted in early 2016. This is going to cost India heavily.

In October, Iran's crude exports were estimated at 1.82 million bpd by Kpler and 1.5 million bpd by another firm that monitors Iranian shipments. "Because you have a monopoly called OPEC [the Organization of Petroleum Exporting Countries], and I don't like that monopoly". Understanding the geo-political situation, India has been able to get its way. We have so many countries that are on our side.

The U.S. State Department says it is exempting Iran's big port project in Chabahar from sanctions in recognition of its importance to landlocked Afghanistan.

As the sanctions start approached, the market started to question how longer demand growth would hold amid oil prices at their highest in four years.

The port provides key supply route to landlocked Afghanistan. Still, Iran demonstrated considerable resilience and ingenuity in coping with earlier global sanctions, and there is little to suggest Tehran could not do this again. The first round was reinstated in August. Even its allies UK, France and Germany, who were co-signatories to the JCPOA, have refused to accept the sanctions. The other signatories to the nuclear deal - Germany, France, Britain, the European Union, Russia and China - have condemned Trump's walkout from the pact. They also stated that they would work with Russian Federation and China as participants to the JCPOA and with third countries interested in supporting the JCPOA.

"They are not supposed to be used by the Iranian government or repatriated into Iran, the only exception is on humanitarian goods and non-sanctioned items, which is mainly the main food items", he said. In May 2018, however, Trump withdrew the United States from the agreement, making a return of sanctions all-but-inevitable.

Other reports by GizPress

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