Rocked by Trump's sanctions, Iranian oil exports drop further

Rocked by Trump's sanctions, Iranian oil exports drop further

Rocked by Trump's sanctions, Iranian oil exports drop further

Iranian Oil Minister Bijan Zanganeh on Monday described a Saudi claim that the kingdom could replace Iran's crude exports as "nonsense".

Trump said Wednesday he talked to Saudi authorities "at the highest level" about Khashoggi, whom Turkish officials say may have been killed in a visit to the Saudi consulate in Istanbul last week.

"Actually the request that America made to Saudi Arabia and other OPEC countries is to be sure that if there is any loss of supply from Iran, that we will supply that". They checked into two hotels in Istanbul, the paper said.

Iran's crude exports have fallen more than expected ahead of the sanctions, even as the Islamic Republic offers Asian customers the cheapest prices in more than a decade versus Saudi grade.

Some energy market analysts expect around 500,000 barrels per day (bpd) to disappear once USA sanctions against Iran come into force, while others have warned as much as 2 million bpd could come offline over the coming months.

Oil also dropped as investors focused on rising output from other producers, such as top exporter Saudi Arabia, to compensate for lower Iranian supplies.

The Saudi statement could have a "short-term psychological effect", he added, but it would not mean much to global energy markets which had shown their concern over shortages by hiking prices.

"What Saudi Arabia had been supplying the market with, were not from [its] spare capacity but from tapping its oil stocks", he pointed out.

In an attempt to compel Iran to agree to a new accord, Trump reinstated sanctions that targeted the Iranian government's purchase of U.S. dollars, Iran's trade in gold and other precious metals, and its automotive sector.

US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, re-imposing economic sanctions against the Persian Gulf nation.

As the Iran sanctions still on the table and looming large, potential spare capacity constraints and also slowdown in United States drilling, USA bank JP Morgan said in its most recent cross-asset outlook for clients that it recommended to "stay long Jan '19 WTI on supply risks to crude". A second round, forthcoming on November 4, will be targeting Iran's oil sales and its Central Bank.

Saudi Arabia, OPEC's largest producer and the world's largest crude exporter, pumped 10.60 million b/d in September, according to the Platts survey, up 110,000 b/d from August.

"We're demanding everything", Mr Trump said when asked if he was demanding information from the Saudis.

US sanctions against Tehran are widely expected to have an immediate impact on Iran's oil exports, although the estimates of exactly how much of the country's oil could disappear from November 4 vary widely.

Following requests from the White House, Riyadh said earlier this year it could increase output by a "measurable amount".

The Middle East crude benchmarks were mixed on Monday with DME Oman's premium to Dubai swaps easing while cash Dubai's premium to swaps edged higher.

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