United States exempts India-backed port in Iran from sanctions

Eileen GuzmanNov 09, 2018

"I did it a little bit because they really asked for some help, but I really did it because I don't want to drive oil prices up to $100 a barrel or $150 a barrel, because I'm driving them down".

US crude production has accelerated to new records, OPEC output is at the highest in years and waivers will allow some Iranian crude to flow to the market despite USA sanctions. "These transponders are created to maximize visibility at sea and turning them off only increases risk of accidents and injuries", Hook said. "Self-insured Iranian tankers engaging in unsafe behavior, with many tons of crude oil on board, are courting environmental and financial disaster".

Iranian officials have said the waivers provide proof that the United States can not achieve its goal of cutting off all of Iran's oil exports.

Brent crude, the global benchmark, dropped by 2.3 per cent to $71.48 a barrel, its lowest since August 20.

The United States on Monday re-imposed oil and banking sanctions on Iran that where lifted under the 2015 nuclear deal but granted waivers to eight major importers to continue buying Iranian petroleum products without penalty for another six months. At this rate, the United States has overtaken Russian Federation as the world's biggest oil producer.

The U.S. Energy Information Administration said U.S. oil production will be higher this year and in 2019 than previously forecasted.

Responding to India Today a State Department spokesperson said that America would allow the projects to move forward and allow carrying of "non-sanctionable" goods through the port to Iran. Waivers granted to the sanctions intensify the market's perception that sanctions may not limit crude supply as much as initially expected.

After starting the week under pressure and recording heavy losses, crude oil staged a modest recovery on Thursday and the barrel of West Texas Intermediate rose to $62.40. This price structure, known as contango, materializes when market players believe there is a supply glut and decide to store oil rather than sell it.

Some market watchers believe the Organisation of the Petroleum Exporting Countries and allies including Russian Federation may take steps to reduce supply.

"OPEC and Russian Federation may use cuts to support $70 per barrel", said Ole Hansen, head of commodity strategy at Saxo Bank.

The OPEC source was responding to a report by Russia's TASS news agency that Russian Federation and Saudi Arabia had started bilateral discussions over possible curbs to output in 2019. The research project does not reflect an active debate inside the government over whether to leave the Organisation of the Petroleum Exporting Countries in the near term, the Journal reported.

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