Oil prices steady after Iranian exports fall further

Oil prices steady after Iranian exports fall further

Indian Oil Minister Dharmendra Pradhan defended the countries actions stating India need Iran to "fulfil" their countries oil requirements.

Iranian crude exports, which reached a peak of some 2.5 million barrels after sanctions were lifted in 2016, have plunged by over 500,000 barrels a day and are expected to dive further when expanded sanctions on oil take effect next month.

The Islamic Republic exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Refinitiv Eikon data showed.

In its March report on Iran's economy, published a month and a half before the USA announced that it was re-imposing sanctions on Iran, the International Monetary Fund expected that following the strong rebound after the 2016 nuclear deal, Iran's economic growth would be 4.3 percent in the 2017/18 fiscal year.

"India is continuing with its relationship with both its key energy partners Iran and the USA", a second source said.

India is going to continue buying Iranian oil in November despite the US sanctions, Reuters reported citing sources close to the Indian oil industry.

Brent crude oil prices fell more than 1 percent on Monday after Washington said it may grant waivers to sanctions against Iran's oil exports next month, and as Saudi Arabia was said to be replacing any potential shortfall from Iran.

"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.

"This is one of the single biggest supportive factors for crude", said analysts at JBC Energy of the U.S.re-imposition of Iran sanctions.

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

Sanctions against Iran will block payment routes for India through the USA dollar. But hedge funds have amassed a large bullish position in Brent crude, amounting to nearly 470 million barrels, betting prices will head even higher.

Pradhan said a new world order was being established and added, "Is this not a recognition of India's leadership?"

"Instead they're talking about 'sufficient pressure, ' which is their language for allowing banks to keep Iran connected to the global financial system, including through SWIFT or with oil waivers", the source said, referring to new efforts by officials in the Treasury Department and European allies to keep Iran connected to the premier worldwide banking system.

Brent crude was down 7 cents at $83.84 a barrel by 0020 GMT. An industry source who also tracks exports said October shipments so far were below 1 million bpd.

The EIA reported crude supplies rose by 8 million barrels for the week ended September 28 - the largest weekly climb year to date.

In the run-up to 2019 general elections, Fitch Ratings recently raised the spectre of return of state control on fuel pricing in India.



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