Home / International/ Oil prices climb as Iran sanctions loom; US looks to prevent supply shortfall

Oil prices climb as Iran sanctions loom; US looks to prevent supply shortfall


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 12 September 2018 00:00


SINGAPORE (Reuters): Oil prices rose on Tuesday amid looming US sanctions against Iran’s petroleum industry, despite efforts by Washington to get other major suppliers to make up for the expected disruption.

US West Texas Intermediate (WTI) crude futures were at $67.70 per barrel at 0637 GMT, up 65 cents, or 0.2 percent from their last settlement.

Brent crude futures climbed 38 cents, or 0.5%, to $77.75 a barrel.

“Markets ... are expecting substantial price pressure as Iran sanction loom,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

Washington is putting pressure on other countries to also cut Iran imports, with close allies like South Korea and Japan, but also India, showing signs of falling in line.

But keen not to see oil prices spike, US Energy Secretary Rick Perry met with Saudi Energy Minister Khalid al-Falih on Monday in Washington, as the Trump administration encourages big oil-producing countries to keep output high ahead of the renewed sanctions. Perry will meet with Russian Energy Minister Alexander Novak on Thursday in Moscow.

Russia, the United States and Saudi Arabia are the world’s three biggest oil producers by far, meeting around a third of the world’s almost 100 million barrels per day (bpd) of daily crude consumption. Combined output by these three producers has risen by 3.8 million bpd since September 2014, more than the peak 3 million bpd Iran has managed during the last three years.

Russian Energy Minister Alexander Novak said on Tuesday that Russia and a group of producers around the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) may sign a new long-term cooperation deal at the beginning of December, the TASS news agency reported. Novak did not provide details.

A group of producers around OPEC and Russia have been voluntarily withholding supplies since January 2017 to tighten markets, but with crude prices up by more than 40% since then and markets significantly tighter, there has been pressure on Russia and OPEC to raise output.

With Middle East crude markets also tightening because of the US sanctions against Iran, many Asian refiners are seeking alternative supplies, with South Korean and Japanese imports of US crude hitting a record in September.

At the same time, American oil producers are seeking new buyers for crude they used to sell to China before orders virtually dried up because of the trade disputes between Washington and Beijing.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Automation and machine learning: Helping organisations extract deeper value from data

Tuesday, 22 January 2019

The world is in the midst of a data explosion. Humans are generating an estimated 2.5 quintillion bytes of data every single day1, according to Forbes, and more data was created in the past two years than in all of human history. No wonder data now r


SL tourism: From TOM to experience the brand in 2019

Tuesday, 22 January 2019

Last week I had just crossed the border that separates Laos from Thailand and was on route via land to Thailand. My mind was on Laos – a country branded globally as ‘Simply Beautiful’ (backed by the ADB in 2018) to attract visitors into the cou


Questionable (or absurd) official report on poverty indicators

Tuesday, 22 January 2019

The latest Report issued by the Ministry of National Policies and Economic Affairs on ‘Poverty Indicators’ is both questionable and outrageous.1This Ministry is under the responsibility of the Prime Minister, Ranil Wickremesinghe. Most of the sta


Teaching the younger generation to observe professional ethics is the need of the hour

Tuesday, 22 January 2019

When Sri Lanka got independence in 1948, it was one of the most promising nations both in Asia and in the Commonwealth countries. It had luckily emerged unscathed after the Second World War unlike our neighbours. Sri Lanka furthermore did not have to


Columnists More