Oil prices rise as Iranian crude exports fall

Marco Green
October 10, 2018

USA sanctions targeting Iran's crude oil exports come into force from November 4, with Washington ratcheting up the pressure on governments and companies around the world to slash their Iranian oil imports to zero.

Indian Oil Corp will lift 6 million barrels of Iranian oil and Mangalore Refinery and Petrochemicals another 3 million barrels, the source said. Iran can use the rupee to settle its imports of pharmaceuticals and other goods from India.

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Furthermore, Leszczynski says that if India were to stop or significantly reduce imports from Iran, it would complicate the strategic relationship it is trying to build between the two countries. India and Turkey have also dismissed the unilateral American measures.

"However it would come at a cost, both in terms of higher oil prices compared to the favourable terms it gets from Iran and in terms of higher shipping costs as they would inevitably be longer distance shipments compared to Iranian exports".

Iranian Oil Minister Bijan Zanganeh on Monday described a Saudi claim that the kingdom could replace Iran's crude exports as "nonsense".

"We do not know if we will get waiver [from United States sanctions] or not", Pradhan said while speaking at The Energy Forum in New Delhi.

The details provided by Refinitiv Eikon showed the Islamic Republic exported 1.1 million barrels per day (bpd) of crude last week. The announcement, the first indication Washington was considering such waivers, followed a Reuters report that India planned to lift some Iranian oil in November although it has been cutting back on Iranian imports recent months.

But Iran, OPEC's third-largest producer, has repeatedly said that its oil exports can not be reduced to zero because of high demand levels in the market and has blamed Trump for an oil price rally caused by imposing sanctions on Tehran.

Russian Federation and China are both pursuing their own systems and Germany has suggested creating Europe's rival to global financial messaging service SWIFT based on the euro rather than the dollar in order to bypass United States sanctions.

On Monday, British daily the Financial Times said European finance ministers will meet US Treasury Secretary Steven Mnuchin in Bali this week and pressure him on allowing Iran to have access to SWIFT.

The US administration is "in the midst of an internal process" of considering significant reduction exemptions, Reuters reported quoting an unnamed government official. Iran has pledged to block any OPEC supply increase that the country deems to be against its interest.

White House National Security Advisor John Bolton said only last week that the administration wanted to avoid all waivers and see Iranian oil and gas exports entirely staunched, but that it might not be able to achieve that aim.

Other reports by Click Lancashire

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