U.S. Sanctions cause Oil Value to Rise

Official says S Arabia unable to replace Iran’s oil

Official says S Arabia unable to replace Iran’s oil

India is considered one of the countries with the highest quantity of crude oil imported from Iran, and the USA prohibition announced by the United States would have a profound effect on India.

Brent fell a mere 20 cents to $84.38, while WTI rose 1 cent to $74.34, these numbers said to be the outcome of the USA unemployment rate falling to a 49 year low of 3.7 percent and somewhat mitigating fears about the sanctions.

Last week, the Iranian foreign minister said India is committed to buying Iranian oil and continuing the two nations' economic cooperation after a meeting with his Indian counterpart.

Meanwhile, the International Court of Justice ordered the U.S. on Wednesday to ease some sanctions against Iran, including those related to the supply of humanitarian trade, food, medicine and the safety of civil aviation. They would like the extra cash that high oil prices... 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".

The apparent about-face comes after India, the second biggest consumer of Iranian oil after China, announced that it will purchase nine million barrels of product from Tehran in November even as renewed sanctions take effect.

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Two domestic companies have placed orders to buy Iranian oil in November, oil minister Dharmendra Pradhan said on Monday, adding that the government does not yet know if it will be granted a waiver from United States sanctions on Iran.

The currency is also set to face an onslaught from last month's decision by the US Federal Reserve to increase the Federal Funds Rate to a range of up to 2.25 per cent from the 1.75 per cent set in June 2018.

Friday marked the end of a particularly volatile week for crude that saw one massive uptick, one massive loss, and everything in between, and culminating in flat trading for the Brent and West Texas Intermediate benchmarks - with traders obsessed over what market impact the us sanctions against Iran will have when they come into effect in November.

Some energy market analysts expect around 500,000 barrels per day (bpd) to disappear once US sanctions against Iran come into force, while others have warned as much as 2 million bpd could come offline over the coming months. Speculators have built bullish long positions on hopes of further price rise. "So, if prices become too high then both Saudi Arabia and us have the capability and capacity to increase production", Dmitriev said.

But Innes warned that limited spare production to deal with further supply disruptions meant "the capacity is quickly declining due to Asia's insatiable demand".

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