Saudis To Boost Oil Supply To India As Iran Sanctions Kick In
- Author: Darren Santiago Oct 11, 2018,
Oct 11, 2018, 18:44
The extra cargoes indicate a willingness by Saudi Arabia to increase crude supply to make up the shortfall once sanctions by the United States on oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), start up on November 4.
Oil prices slumped to two-week lows on Thursday as global stock markets fell, with investor sentiment made more bearish by an industry report showing USA crude inventories rising more than expected.
Saudi Arabia remained silent at the accusation as the images were seen around the world, raising pressure on the kingdom to explain what happened to the writer, a critic of Saudi Crown Prince Mohammed bin Salman.
"This rapidly declining availability of Iranian barrels within the anticipatory phase of the oil sanctions could prove to be a powerful bullish force but also one that can quickly subside once these sanctions are fully realized next month", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Iran's crude exports fell further in early October as buyers sought alternatives ahead of US sanctions that take effect on November 4, according to tanker data and an industry source.
Saudi Arabia is set to deliver extra 4 million barrels of its oil to India in November, Reuters reported on Wednesday, citing several sources familiar with the plans, in what could be a Saudi move to replace the loss of Iranian barrels due to the US sanctions on Tehran returning early next month. American crude increasingly flows to markets in Asia, Europe and Latin America, data from the US Energy Information Administration show.
Oil headed for the biggest two-day drop since July as fears over a worsening trade war rattled global markets. Volumes to Japan and India rose by 198 per cent and 165 per cent, respectively.
"The pattern of trade does look as though it's going to ebb away from a focus on China to other Asian countries, and Europe", said Caroline Bain, chief commodities economist at Capital Economics.
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In addition to shutting in wells, oil producers also halted most offshore drilling operations by evacuating three drilling rigs and moving eight others out of the storm area, BSEE said.
Crude has eased after climbing to a four-year high earlier this month.
Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) together have placed order for 1.25 million tonne (MT) of crude oil from Iran.
The official's comments followed news that India, Iran's No. 2 oil customer after China, will buy 9 million barrels of Iranian oil in November. Kuwait is directing more flows to Asia, while its shipments to the U.S. by late September all but dried up - the first time that's happened since the Gulf War of 1990-91.
However, the Trump administration this weekend announced it is considering waivers on sanctions for countries that are merely reducing their imports of Iranian oil.
Meanwhile, archrival Saudi Arabia and Iran are exchanging in the media diverging opinions on who's making up for lost Iranian oil barrels, or rather whether it's even possible to do so.
The traders said, however, they expected some demand destruction in emerging market economies to help cap oil prices. "It's been a major influence that has forced a change in trade flows".