In the previous round of sanctions from 2012 to 2015, India continued to buy Iranian crude although it had to cut purchases significantly to protect its wider exposure to the US financial system. This would signal an attempt to bypass US sanctions on Iranian transactions using the dollar - the dominant currency in global oil trade. The early October figures add to signs, however, that Iranian exports are falling more steeply than expected, stretching the ability of Saudi Arabia, non-OPEC Russia and other producers to fill the gap.
Another factor easing those fears was a Friday Reuters report that cited an unnamed us government official as saying the Trump administration is considering waivers on its sanctions for countries that agree to reduce their imports of Iranian oil.
Pradhan said he had urged Saudi Arabia's oil minister to keep in mind the interests of oil consuming countries when it came to higher prices.
Last applied from 2012 to 2015, the sanctions are in retaliation for Iran's supposed nuclear proliferation program.
New Delhi and Tehran have reportedly discussed reverting to rupee trade after November 4. Last week, the Saudis hastened to inform the market that they are now pumping 10.7 million bpd-just shy of the all-time record high-and could even tweak that 10.7 million "slightly higher" next month. While top officials in the Trump administration, including President Trump himself, have vowed to crack down on global business dealings with Iran, some officials have been working to lessen the severity of these sanctions through waivers and other concessions that would help Iran's ailing economy.
As the start date of the US sanctions on Iran's oil is less than four weeks away, the market is jittery and prone to emotional reactions regarding the two key uncertainties over the next couple of months-how much Iranian oil will be lost to the USA sanctions, and how much spare capacity Saudi Arabia can bring (or is willing to bring) to offset possible steep losses.
"Even without sanctions also, Iran had been accepting payments in rupee". This likely means we won't see any serious buying this week unless the price is right.
In the previous round of USA sanctions on Iran from 2012 to 2015, India continued to purchase Iran's oil although it was forced to dramatically reduce its purchases to protect its wider exposure to the US financial system.
This is the first public statement made by the Government on its stand on sourcing Iranian oil once the U.S. sanction on Iran pertaining to the oil industry comes into force.
The best value zone for the November WTI crude oil market is $72.35 to $71.27.