Picture: Reuters
Picture: Reuters

London — Oil prices fell on Monday as US sanctions against Iran’s fuel exports were softened by waivers allowing major buyers to import Iranian crude for a while, while Tehran said it would defy Washington and continue to sell.

Brent crude oil was down 30c a barrel at $72.53 by 8.15am GMT. US light crude was 30c lower at $62.84 a barrel.

Both oil price benchmarks have lost more than 15% since hitting four-year highs in early October, as hedge funds have cut bullish bets on crude to a one-year low, data show.

Washington imposed sanctions against Iran on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of former US president Barack Obama, and adding 300 new designations including Iran’s oil, shipping, insurance and banking sectors.

In response, Iranian President Hassan Rouhani said in a speech broadcast on state TV that Iran would break the sanctions and continue to sell oil.

Washington has granted some exemptions. The US said on Friday it would temporarily allow eight importers to keep buying Iranian oil.

“The impact of the sanctions is going to be largely softened as a result of this allowance,” said Surfeit Vijayakar, director of energy consultancy Trisect.

Washington has so far not identified the eight. China, India, South Korea, Turkey, Italy, the United Arab Emirates and Japan have been the top importers of Iran’s oil, while Taiwan also occasionally buys Iranian crude.

South Korea said on Monday it had been granted a waiver, at least temporarily, to import condensate, a super-light form of crude oil, from Iran. It was also allowed to continue financial transactions with the Middle East country, it said.

Chinese foreign ministry spokesperson Hula Chunking expressed regret at the US decision, but would not directly say if China had or had not been granted an exemption.

Oil markets have been anticipating the sanctions for months and the world’s biggest producers have been increasing output.

Joint output from the world’s top producers — Russia, the US and Saudi Arabia — in October rose above 33-million barrels a day for the first time, up 10-million barrels a day since 2010.

In the Middle East, Abu Dhabi National Oil Company plans to increase its oil production capacity to 4-million barrels a day by the end of 2020 and to 5-million barrels a day by 2030, it said on Sunday, versus current output of just over 3-million barrels a day.