Threats from US put new pressure on Iranian oil importers | AP business

01 July, 2018, 08:29 | Author: Barbara Daniel
  • Crude oil continues to run. Up 1.9% on the day.

Since the group's production is now below this ceiling, the fact of respecting it will naturally increase by a little less than a million barrels, according to the minister.

A major OPEC meeting on Friday resulted in an agreement to enhance production by up to 1 million barrels per day.

Iran had struck the JCPoA (Joint Comprehensive Plan of Action) deal with the United States, the UK, Russia, China, France and Germany after years of negotiations.

The Saudi Arabian Oil Minister won the day by managing to paper over the cracks among Opec members and clinch a deal that appears to have satisfied everyone.

But Iraq has always attempted to maximise output because of its enormous need for revenues to meet heavy budget commitments and it plays little practical role in OPEC's production policy. Saudi Arabia could divert extra barrels into storage. It was the third largest exporter to Korea following Saudi Arabia at 28.5 percent and Kuwait at 14.3 percent.

Meanwhile, news agencies reported that petroleum ministry held a meeting with oil refineries on Thursday to find alternatives to oil supplies from Iran on Thursday.

However, reality tells a different tale because of geopolitical problems that have decimated Venezuela's ability to produce its quota.

India's Oil Ministry has asked refiners to prepare for a "drastic reduction or zero" imports of Iranian oil from November, two industry sources said, the first sign that New Delhi is responding to a push by the United States to cut trade ties with Iran.

The U.S. State Department laid down the gauntlet as the United States threatened to slap sanctions on countries and companies that don't cut oil imports from Iran to "zero" by November 4.

That raises the odds of a much more serious outage from Iran than previously expected.

"Oil prices were flying higher overnight after catching an updraft from the US administration calling for allies to cut Iran imports to zero tolerance", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA.

In another sign of how unpredictable the oil market has become, Kazakhstan lost 240,000 bpd this week, due to an unknown cause.

Worse, ramping up to 11 mb/d significantly cuts into available spare capacity.

Since 2016, however, Saudi Arabia has forged an effective working relationship with Russian Federation and a group of other, smaller non-OPEC producers to limit output.

Anna Belova, a senior analyst for oil and gas at analytics company GlobalData, said the OPEC-led decision to ease compliance with production arrangements was good for Russian oil companies Gazprom Neft, Lukoil and Rosneft, which have the capacity to add hundreds of thousands of barrels of oil to the market. That would be down from about 3.0 to 3.5 mb/d up until recently.

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