Tuesday, 25 June, 2019

Saudi Arabia unable to replace lost Iranian oil - Iran’s oil minister

US considers sanction waivers on countries reducing imports of Iranian oil India buying Iran oil in defiance of Trump sanctions
Ginger Lawrence | 09 October, 2018, 07:08

But Iran, OPEC's third-largest producer, has repeatedly announced that its oil exports can not be reduced to zero because of high demand levels in the market.

"Of course it could find alternative supplies, from other parts of the Middle East or from the USA itself", said Leszczynski.

State refiners Indian Oil Corporation Ltd (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) have contracted 1.25 million tonnes of Iranian oil for import in November.

Last week, India reduced gasoline and diesel prices to give relief to consumers against rising global crude prices caused by uncertainty over USA sanctions on Iran and OPEC's decision to raise output.

That's down from at least 2.5 million bpd in April, before President Donald Trump in May withdrew the US from a 2015 nuclear deal with Iran and reimposed sanctions.

US Secretary of State Mike Pompeo said in India last month that the administration would consider sanction waivers and that Iranian oil buyers should take a "little bit of time" to stop their trade with Iran.

Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers are seeking alternatives ahead of the start of the USA sanctions on November 4 and creating a challenge to other OPEC oil producers as they seek to cover the shortfall.

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But he acknowledged he saw no quick fix for what he called "the raw edges of this polarisation" afflicting American politics. Late last month, lawmakers passed an $854 billion spending bill that averted a government shutdown.

A first round of American sanctions took effect in August, targeting Iran's access to the United States dollar, metals trading, coal, industrial software, and auto sector.

Pradhan said a new world order was being established and added, "Is this not a recognition of India's leadership?"

The oil minister also teased the idea of using a different currency to buy the Iranian oil - their own currency the Indian rupee.

Oil also dropped as investors focused on rising output from other producers, such as top exporter Saudi Arabia, to compensate for lower Iranian supplies which have fallen further in October according to export data.

Opec accounts for around 40% of the global production.

Brent crude oil prices fell more than 1 percent on Monday after Washington said it may grant waivers to sanctions against Iran's oil exports next month, and as Saudi Arabia was said to be replacing any potential shortfall from Iran.

The news of India's continued importation of Iranian crude had a positive effect on oil prices, with Brent crude down 1.6% to $82.79 at the time of writing on Monday morning.