Oman's oil output estimated at 30mn in July

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"We believe that any cutback in China's crude oil imports from the US due to US-China trade tensions will see more US crude cargoes heading towards Europe, India and Southeast Asia", Lim Jit Yang, director for Asia at S&P Global Platts Analytics, said.

USA crude futures were down 67 cents at $68.50 a barrel; front-month Brent crude oil futures were down 38 cents on the day at $74.27 a barrel.

Indian refiners' interest in USA crude will be welcome news to shale producers looking for buyers outside of China, which is likely to scale back imports as the trade dispute between the administration of President Donald Trump and Beijing escalates.

Muscat: The monthly report issued by the Ministry of Oil and Gas (MOG) indicated that the Sultanate's production of crude oil and condensate throughout July 2018 amounted to 30.24 million barrels, with a daily average of 975,500 barrels.

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Crude oil prices moved higher on Monday, lifted by a report that showed crude production in Saudi Arabia unexpectedly dipped in July. The sanctions, which would come into force from November 4, are likely to block current payment routes used to pay for Iranian imports.

This time around, some of Iran's former creative methods in trade with Asian customers, including a barter system which avoids sanctionable transfers to the nation, may also work with the Europeans.

All the Persian Gulf oil exporters such as Saudi Arabia, Iran, Iraq, Kuwait, Qatar, the UAE, and Bahrain, ship their crude oil to the worldwide market through the Strait of Hormuz.

"Many countries, including Europeans, disagree with the US sanctions and are willing to work with Iran", said the official, who asked not to be named.

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U.S. West Texas Intermediate (WTI) crude futures were up 19 cents, or 0.3 percent, at $68.68 barrel.

The expected paring of India's imports from Iran after this month and the increase in purchases from the United States also raise questions about the politics of oil.

"The market continues to price in geopolitical risk from the reimposition of sanctions by the US on Iran", said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.

The EIA said refineries last week processed 17.6 million barrels of crude daily, compared with 17.5 million bpd a week earlier, with gasoline production at 9.9 million bpd and distillate production at 5.2 million bpd.

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"Even before their implementation, these proposed (Chinese) tariffs are starting to have an impact, with Chinese imports of US crude falling by 70 percent from April to July", Goldman Sachs said in a note on Wednesday. Global oil demand continues to be robust on the back of strong economic growth. China has proposed to impose retaliatory tariffs on $60 billion worth of US goods, including Liquefied Natural Gas (LNG), fueling speculation that it could also impose tariffs on oil.