Brent crude LCOc1 futures were down 2 cents at $84.98 a barrel by 0049 GMT, after a 1.3 percent gain on Tuesday.
"Some of our companies have already nominated their quota for November", said the Minister for Petroleum and Natural Gas, while referring to import of Iran's oil by Indian companies. An industry source who also tracks exports said October shipments so far were below 1 million bpd.
In May, before U.S. President Donald Trump announced that he was reinstating sanctions against Tehran, the International Monetary Fund had projected Iran's economy would grow by 4 percent in 2018 and 2019.More news: See Ruby Rose as The CW's brand new Batwoman
That's prompted concerns about where the world will get its oil, which has pushed Brent prices as high as $86 a barrel, the highest since 2014.
Sources said this time around the entire 100 per cent of Iranian oil import bill can be paid in rupees. Even in the case of Iran there is an expectation that its oil exports may fall less sharply than feared, while Libya's oil production has stated to rise.
According to an executive order (EO 13846) issued by President Donald Trump, all American and non-American entities were given a six-month "wind-down" period from May 2018, in which to "zero out" all transactions with designated Iranian oil companies and port operators.
The EIA reported crude supplies rose by 8 million barrels for the week ended September 28 - the largest weekly climb year to date.More news: Apple fixes iPhone XS charging problems (and more) in iOS 12.0.1
Another factor easing those fears was a Friday Reuters report that cited an unnamed us government official as saying the Trump administration is considering waivers on its sanctions for countries that agree to reduce their imports of Iranian oil.
US sanctions against Tehran are widely expected to have an immediate impact on Iran's oil exports, although the estimates of exactly how much of the country's oil could disappear from November 4 vary widely. While private companies like Reliance and Nayara Energy (Essar) have had to drastically reduce their purchases, public sector companies, who are more immune to US strictures, and already have alternate banking arrangements and a "rupee-rial" mechanism, are staying the course for now.
But Innes warned that limited spare production to deal with further supply disruptions meant "the capacity is quickly declining due to Asia's insatiable demand". The early October figures add to signs, however, that Iranian exports are falling more steeply than expected, stretching the ability of Saudi Arabia, non-OPEC Russia and other producers to fill the gap.
Another production headwind helping to boost prices, Hurricane Michael, is expected to hit the Gulf of Mexico region Tuesday, threatening almost 300 miles of the Gulf coast.More news: Trump says UN ambassador Haley to leave at end of year