Trump Administration Examines Path to Waive Iranian Oil Sanctions

Daniel Fowler
October 10, 2018

India would continue its energy imports from Iran even in the wake of the United States government's 4 November deadline, hinted petroleum minister Dharmendra Pradhan on Monday.

In a sign that Iran oil exports won't fall to nothing from November, India will buy 9 million barrels of Iranian crude next month, Reuters reported on Friday.

Prince Mohammed told Bloomberg on Friday that the kingdom had met its promise to Washington to make up for Iranian oil supplies lost through USA sanctions, reimposed when the United States exited a 2015 nuclear deal between Tehran and six powers.

Later, talking to reporters, he said India has its own energy requirements which it has to fulfill.

At the same time, Iran's Oil Minister Bijan Zanganeh on Monday called a Saudi claim that the kingdom could replace Iran's crude exports "nonsense".

Oil prices rose on Tuesday on growing evidence of falling crude exports from Iran, OPEC's third-largest producer, before the imposition of new USA sanctions and a partial shutdown in the Gulf of Mexico due to Hurricane Michael.

The IMF said the contraction in the Iranian economy that it now is projecting over the next two years was due to "reduced oil production" under the sanctions.

In May, before U.S. President Donald Trump announced that he was reinstating sanctions against Tehran, the International Monetary Fund had projected Iran's economy would grow by 4 percent in 2018 and 2019.

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Iran accounts for 10% of India's crude oil imports, making it the second largest importer of Iranian oil behind China.

India had thus far not publicly articulated its stand on the issue, but with the advance orders placed for November, has made it clear that India will not "zero out" its oil intake from Iran.

On Nigeria's interest rate, he said, "The current state of tightening will continue until at least we see inflation attaining those levels that have been set as a target".

Benchmark Brent crude was up 65 cents at $84.56 a barrel by 0850 GMT, having fallen as low as $82.66 on Monday.

That's prompted concerns about where the world will get its oil, which has pushed Brent prices as high as $86 a barrel, the highest since 2014.

That is an 11 percent decline from August, but data from global oil shipments and storage service provider puts the export volume north of 2 million bpd.

The cost of the Indian basket of crude rose to $84.14 a barrel on 5 October, according to the Petroleum Planning and Analysis Cell.

The Minister also categorically stated that the government's directive to oil companies to absorb a Rs. 1 per litre hit to the price of petrol and diesel was not a reversal of the deregulation of oil prices. It added that the effective reversal of fuel price deregulation would also constrain future private sector investments in the sector.

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