Oil Prices Fall Amid Iran Sanctions
Iran’s oil exports have fallen sharply since US President Donald Trump announced in mid-year that he would impose sanctions on Tehran, but with Washington’s exceptions, Tehran’s top customers could boost orders for next month.
The original aim of US sanctions is to reduce Iran’s exports to the maximum extent possible, but the exemptions granted to Iran’s biggest customers will allow them to continue buying some Iranian oil for at least 180 days, which means exports will begin to recover after November.
Commercial data show that the eight countries exempted from sanctions – China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey – buy up to 75 percent of Iran’s oil exports by sea.
Due to pressure from Washington before sanctions came into effect, Iran’s exports in November may not exceed 1.5 million bpd, according to industry estimates, about one-third of the highest level of exports by mid-year.
“US sanctions are expected to reduce Iran’s crude exports to 1.1 million bpd in November,” according to S & P Global Plats Analytics.
Japan’s oil minister is expected to resume oil imports from Tehran after Tokyo received an exemption from US sanctions, Commerce Minister Hiroshige Seko said on Tuesday.
According to sources in the oil trade sector, a number of importers in Asia are already considering an increase in orders from Iran soon.
“Inquiries about shipments from Iran come from a number of Asian buyers,” said a trader who refused to be named because he was not authorized to talk about his company’s business activities.
Extensive exceptions to the sanctions have eased concern over supply shortages, easing pressure on companies, governments and economies around the world that have suffered from rising fuel prices.
US President Donald Trump on Monday said he wanted to impose sanctions on Iran’s oil gradually, citing fears of a shock in the market leading to a jump in world oil prices.
This helped ease the impact of the sanctions threat, which led Brent Crude’s crude futures to a four-year high of around $ 87 a barrel in early October.
Brent prices are currently about 15 percent below their highest level, but have barely moved in the last two sessions.