Despite US sanctions, India to continue buying Iranian oil

Andrew Cummings
October 8, 2018

US sanctions will target Iran's crude oil exports from November 4, and Washington has been putting pressure on governments and companies worldwide to cut their imports to zero.

The U.S. Labor Department's employment report showed that average hourly earnings increased 0.3 percent in September, while the unemployment rate fell to near a 49-year low of 3.7 percent.

"One way or another, it looks as though India is going to take some Iranian crude", said Olivier Jakob of Petromatrix, adding that the development was helping oil to "retrace some of the price surge we saw last week".

US West Texas Intermediate (WTI) crude futures were up 55 cents, or 0.7 percent, at $74.88 a barrel.

Brent crude LCOc1 futures gained 9 cents to $84.67 a barrel.

In the short-term, prices will go up but it won't last, Barclays predicts.

WTI's weekly gain was about 1.3%; Brent's was around 1.4%.

Khamenei's comments came prior to the date of US President Donald Trump's second batch of sections against Tehran, expected next November 4. The Trump administration wants to cut off money from the Iranian regime to pressure the leaders back into a new nuclear agreement.

Oil is heading for the longest run of weekly gains since January on concern that higher Saudi and Russian output may not prevent a supply crunch as impending US sanctions squeeze Iranian exports.

Khamenei said the United States has no other solution to confront Iran except through economic sanctions. Indeed, just recently, China - which like Russian Federation had vowed to aid Iran in resisting USA sanctions - "caved" to US pressure, after its top oil importer Sinopec announced last week that it would reduce its Iranian oil imports by half.

Like Putin, Al-Falih blamed part of the increase on the market's anticipation of disruptions in Iran and elsewhere, rather than the current balance between supply and demand.

Saudi Arabia could unilaterally increase production to offset Iranian crude.

In its lawsuit against the U.S., the Islamic Republic of Iran argued that the sanctions violate the terms of the 1955 Treaty of Amity between Iran and the U.S. It also called on the court to order the U.S. government to immediately stop its destructive measures. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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