Oil set for longest losing run since 2014 as supply fears ease

Cheryl Sanders
November 9, 2018

Oil prices declined on Tuesday as the United States allowed eight major importers to continue buying oil from Iran for 180 days despite its sanctions against the Middle East country.

President Erdogan of Turkey said that his country would not abide by the sanctions, which he...

Trump denounced the deal, which lifted sanctions on Iran in return for limits on its nuclear program. Of course, it is unclear how long the less-hawkish United States stand on Iran will continue.

The sanctions are meant to exert pressure on Iran to renegotiate its 2015 nuclear deal with world powers, which Trump walked away from this year.

The record U.S. production has been a moderating factor of oil prices, although oil got a bump on Thursday after record Chinese crude imports eased concerns that a slowdown in the world's No.2 economy could stoke an emerging fuel glut.

Crude has tumbled nearly 20 percent since touching a four-year high last month as bearish supply signals around the globe crowded out concerns about disrupted exports from Iran and Venezuela.

Brent crude had dropped from a four-year high in October above $86 a barrel to $71 on Tuesday.

"These transponders are created to maximize visibility at sea and turning them off only increases risk of accidents and injuries", Hook said. "Self-insured Iranian tankers engaging in unsafe behavior, with many tons of crude oil on board, are courting environmental and financial disaster". A further drop is on the cards for November, with the caveat that tracking Iran's exports has become more hard given that state-owned tankers are turning off their vessel-monitoring systems.

This week, reports emerged that South Korea received a waiver allowing it to import around 4 million barrels a month, equal to about 130,000 bpd, of Iranian crude and condensate. Demand in the biggest markets U.S., China, Europe, and India says Hinds "remains resilient".

India, Iran's second-biggest oil customer, also cut orders ahead of the sanctions, hoping its effort to reduce reliance on Tehran would pay off in Washington and win it a waiver once the sanctions restarted.

Saudi-led OPEC and its allies including Russian Federation decided in June to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to reduce oil prices and make up for supply losses from Iran.

But they may not be happy if crude prices continue to weaken. "I did it a little bit because they really asked for some help, but I really did it because I don't want to drive oil prices up to $100 a barrel or $150 a barrel, because I'm driving them down".

"If Iranian tankers make calls to your ports or transit through your waterways, this comes at great risk", Brian Hook, the State Department's special representative on Iran policy told journalists.

Other reports by iNewsToday