Iran floats surplus oil as demand falls ahead of US Sanctions

India’s Iran oil purchases to fade ahead of U.S. sanctions

India’s Iran oil purchases to fade ahead of U.S. sanctions

At the same time, the report noted that OPEC crude output rose to a nine-month high of 32.63 million b/d in August, helping to offset the declines observed in Venezuela and Iran.

In June, India, the largest buyer of Iranian oil after China, said it expects to import less oil from Iran in the coming months because it wants to protect its exposure to the United States financial system.

USA energy companies this week added oil rigs for a second week in a row with crude prices trading near their highest since the summer of 2015 as major oil producing countries extended a global deal to limit supply.

It is also encouraging other oil producers such as Saudi Arabia, Russia and other member states of the Organization of the Petroleum Exporting Countries (OPEC) to pump more to meet the shortfall. China and India has also significantly cut oil imports from Iran.

Prices are holding at a lower level under pressure from high U.S. East Coast gasoline stockpiles and a sense that there will be considerable demand destruction from Hurricane Florence, which made landfall on Friday, said John Kilduff, a partner at Again Capital in NY.

Concerns over the U.S.

At press time, Brent crude is trading at $78.35 per barrel, having clocked a low of $77.87 yesterday.

The EIA expects that US crude oil production, most of it light sweet crude, will continue to exceed Russian and Saudi Arabian crude oil production for the remaining months of 2018 and through 2019.

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"It increases the odds that there will be less oil coming out of there", said Phil Flynn, an analyst at Price Futures Group.

Washington reimposed some of the financial sanctions from August 6, while those affecting Iran's petroleum sector will come into force from November 4.

The OPEC governor is typically the second most senior post in a country's OPEC delegation after the oil minister.

In theory Saudi Arabia could immediately raise output to 11.5 million barrels a day-that's what Crown Prince Mohammed bin Salman told Bloomberg in April 2016.

USA crude oil production is expected to rise by 840,000 bpd to 11.5 million bpd next year, lower than a previous expectation to increase 1.02 million bpd to 11.7 million.

However, bringing it down to zero by November is a tall ask given that oil from elsewhere is bound to be more expensive than the discounted rates being offered by Iran, and the fact most Indian refineries are geared for the kind of oil that Iran supplies.

Novak also said that sanctions on Iran brings "huge uncertainty on the market - how the countries, which buy nearly 2 million bpd of Iranian oil will act".

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