Tehran says Saudi Arabia unable to replace lost Iranian oil

Roman Schwartz
October 8, 2018

However, a US government official said on Friday that the country could consider exemptions for nations that have already shown efforts to reduce their imports of Iranian oil.

A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Gulf July 25, 2005. An industry source who also tracks exports said October shipments were so far below 1 million bpd. China is reportedly reducing its oil imports from Iran, though it's not likely to fully comply with the USA demands.

Tanker schedules are often adjusted and exports can vary week by week.

Petroleum Minister Dharmendra Pradhan said two state-owned oil refiners, Indian Oil Corporation and Mangalore Refinery and Petrochemicals, had signed contracts to import 1.25 million tonnes of Iranian oil next month, Mint newspaper reported.

But New Delhi needs a waiver to ensure its wider exposure to the US financial system is not affected.

In an interview with Russia's Sputnik news agency, Iran's Deputy Foreign Minister Abbas Araqchi warned of the "serious effects" of the upcoming United States sanctions against Iran on oil prices and the entire Middle East. Brent hit a four-year high of $86.74 last week.

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The report of a small crude decline eased fears that had pressured oil prices after US government data on Wednesday showed a large build in the USA commercial crude stockpile. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

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.

The US administration is "prepared to work with countries that are reducing their imports on a case-by-case basis", the official added.

Oil traders initially reacted to a selloff in Chinese stocks, but as the USA stock market opened higher, "we've pulled back dramatically", said Mark Anderle, an energy trader at TAC Energy. Iran has pledged to block any OPEC supply increase that the country deems to be against its interest.

With Iran sanctions still on the table, potential spare capacity constraints and also a slowdown in USA drilling, US bank J.P.Morgan said in its latest cross-asset outlook for clients that it recommended to "stay long Jan '19 WTI on supply risks to crude".

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