US could issue waivers for Iran crude; oil prices dip Monday

Mae Love
October 10, 2018

Elsewhere, the second largest importer of Iranian oil, India, is planning to purchase 300kbpd of Iranian oil in November. USA light crude CLc1 was down 15 cents at $74.81. A government official added that the administration was in the middle of an internal process of considering waivers called significant reduction exemption.

The extra cargoes indicate a willingness by Saudi Arabia to increase crude supply to make up the shortfall once sanctions by the United States on oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), start up on November 4.

"Iran has been off-and-on taking rupee payments for oil it sells".

In a sign that Iran oil exports won't fall to nothing from November, India will buy 9 million barrels of Iranian crude next month, Reuters reported on Friday.

Last week, the United States said it was considering waivers from sanctions on countries that were trying to reduce oil imports from Iran. Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said there was also "chatter that Saudi Arabia has replaced all of Iran's lost oil".

Some analysts predict as much as 1.5 million barrels per day could be removed from the market, an event that could cause prices to rise further. Prices are up six cents more than a month ago and 41 cents more than this time past year.

The IMF, however, predicted Iran's economy will sink deep in the red due to renewed USA sanctions.

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"There is growing concern that suppliers such as Saudi Arabia and Russian Federation will struggle to compensate for potential production declines from Iran and Venezuela, which has supported oil prices in today's trading session", said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

UCO Bank had in the previous round of sanctions handled rupee payments. "State's been pushing very hard on this, they deserve a lot of credit for their efforts, so let's see what they come up with before criticizing".

Besides, New Delhi sought to get around the restrictions by supplying goods including wheat, soybean meal and consumer products to Iran in exchange for oil.

In the previous round of USA sanctions on Iran from 2012 to 2015, India continued to purchase Iran's oil although it was forced to dramatically reduce its purchases to protect its wider exposure to the US financial system.

Meanwhile, producers in the U.S. Gulf of Mexico on Tuesday cut oil production by about 40 percent as Hurricane Michael approached the Florida coast, the Bureau of Safety and Environmental Enforcement (BSEE) said, citing reports from 27 companies.

Has the simmering crude oil market peaked, even if for the time being?

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