Oil rises on decrease in Iranian exports
Brent is stronger after data shows that Iranian exports in October have fallen from September ahead of US sanctions against Tehran
Seoul — Oil prices rose on Tuesday on signs Iranian oil exports in October have fallen from September ahead of US sanctions against Tehran that are set to start in November.
International benchmark Brent crude for December delivery rose 27c, or 0.33%, to $81.05 a barrel by 3.25am GMT.
US West Texas Intermediate (WTI) crude for November delivery was up 12c at $71.90 a barrel.
Iran has exported 1.33-million barrels a day (bbl/day) to countries including India, China and Turkey in the first two weeks of October, according to Refinitiv Eikon data. That was down from 1.6-million barrels a day in September, the data showed.
The October exports are a sharp drop from the 2.5-million barrels a day exported in April before US President Donald Trump withdrew from a multi-lateral nuclear deal with Iran in May and ordered the re-imposition of economic sanctions on the country, the third-largest producer among the members of oil cartel Opec.
The sanctions on Iran's petroleum sector will go into effect on November 4.
“Uncertainties will remain until November 4 when it would be clear whether the US would want to cut Iran oil exports to zero or grant waivers,” said Vincent Hwang, commodity analyst at NH Investment & Securities in Seoul.
“Brent prices are likely stay in the range of $80 a barrel or slightly higher, while WTI prices are likely to be $70-$75 a barrel,” Hwang said.
Crude prices have also been supported by geopolitical tensions caused by the disappearance of a Saudi Arabian journalist in Turkey. Turkish official have alleged Saudi Arabian intelligence officers killed the journalist Jamal Khashoggi on October 2 at the Saudi consulate in Istanbul.
US President Donald Trump threatened “severe punishment” for the kingdom if the journalist is found to have been killed. Trump dispatched secretary of state Mike Pompeo to Saudi Arabia to meet the country’s leader King Salman.
Saudi Arabia, the world’s largest oil exporter, has denied the allegation. Saudi Arabian officials said it would retaliate against any actions taken over the Khashoggi case.
With the world’s only sizable spare oil output capacity, Saudi Arabia is expected to export more to offset the loss of Iranian oil supply from the sanctions.
Saudi Arabia’s energy minister, Khalid al-Falih, said on Monday at a conference in New Delhi that the kingdom is committed to meeting India’s rising oil demand and is the “shock absorber” for supply disruptions in the oil market.
The country is preparing to admit to causing the death of Khashoggi, according to CNN and New York Times reports on Monday.
“For now, concerns around the disappearance of a Saudi Arabian national appear to be limited to the political sphere,” a Houston-based consultancy Stratas Advisors said in a note.
But WTI prices could fall in the back half of the week, weighed by an increase in US crude inventories, the note said.
US crude stockpiles were forecast to have risen for the fourth consecutive week by about 1.1-million barrels in the week ended October 12, according to a Reuters poll ahead of reports from the American Petroleum Institute (API) and the US department of energy’s Energy Information Administration (EIA).
The institute’s data is due for publication at 8.30pm GMT on Tuesday, and the EIA report is due at 2.30pm GMT on Wednesday.
Reuters