India buys 75% less U.S. oil, loads up on Iran crude

08 October, 2018, 07:38 | Author: Brooke Harris
  • US considers sanction waivers on countries reducing imports of Iranian oil

The billion-dollar question for the month is definitely who will fill in the gap for the Iranian oil that is about to be removed from the market due to another phase of USA sanctions.

With Iran sanctions still on the table, potential spare capacity constraints and also a slowdown in United States drilling, USA 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".

The U.S. Labor Department's employment report showed that average hourly earnings increased 0.3 percent in September, while the unemployment rate fell to near a 49-year low of 3.7 percent.

India will buy 9 million barrels of Iranian oil in November, an industry source told Reuters, indicating that the world's third biggest oil importer would continue to buy crude from the Islamic republic despite US sanctions coming into force on Nov. 4.

She also said that the ICJ's decision on Iran-U.S. dispute is binding for Washington and must be obeyed.

As exports have fallen, domestic refinery runs have increased sharply.

Further weighing on oil prices was "chatter that Saudi Arabia has replaced all of Iran's lost oil", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

Trump wins: Brett Kavanaugh confirmed to Supreme Court
Though the fight to confirm Trump's pick is now official over, the impact of Kavanaugh's confirmation will have a lasting effect. That's what they have become. "Very, very good", Mr Trump said. "Republicans are the party of law and order and justice".

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.

Russian Federation is pumping record volumes of crude and Saudi Arabia is nearly there too. Indeed, some well-regarded analysts have warned that if oil prices reach $100, it could lead to a global economic collapse and a collapse of the equity market.

The market is expected to remain volatile till it gets clarity on what will be the ultimate drop in Iranian exports and to what extent other oil producers will fill the gap.

Crude futures rose to a four-year high this past week as the market prepares for the return of United States sanctions on Iran, the world's seventh largest producer of oil and a significant military power in the Strait of Hormuz, through which a third of the world's oil supply passes each day.

Yet that hasn't stopped U.S. President Donald Trump from continuing to blame the Organization of Petroleum Exporting Countries for a sharp rise in prices this year, even as his administration vows to choke off all of Iran's oil exports.

Moral of the story: Every nation for itself.

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