India to keep buying Iranian oil despite US sanctions

Adjust Comment Print

In May, Trump pulled the United States out of the Iran nuclear deal despite objection from the other signatories, the UK, Russia, Germany, China, and France, re-imposing sanctions lifted under the deal.

"Iranian export losses have already accelerated faster than we expected", said Paul Sheldon, S&P Global Platts Analytics' chief geopolitical adviser.

Phil Flynn, senior market analyst at Price Futures Group, summarized: "A strong economy, low unemployment would suggest the US consumer is going to continue to fair well with higher energy prices".

Reuters separately said that India will buy 9 million barrels of Iranian oil in November, indicating that the world's third biggest oil importer would continue to buy crude from the Islamic Republic despite the USA sanctions.

More news: Liverpool v Manchester City: Gripping rivalry to deliver another titanic tussle

Saudi Arabia and Iran are both members of OPEC.

While Russia's involvement in brokering this no-longer-secret deal with the Saudis seems to contradict its own geopolitical interests and public statements, there are a few motives that seem to explain the Russian decision to aid the USA effort to offset a coming supply shock resulting from the removal of Iranian oil from the global market.

As exports have fallen, domestic refinery runs have increased sharply.

Estimates of the sanctions impact have increased sharply since May, when many analysts still expected the U.S. to grant widespread waivers to countries that make significant cuts, as the administration of Barack Obama did in 2012-15. But its output has declined sharply in recent months under the threat of USA sanctions. That's why Saudi Arabia has been hesitant to have OPEC and other big producers like Russian Federation dramatically raise production.

More news: Wife says Interpol chief sent knife image as danger signal

While concerns about $100 a barrel oil have run rampant recently, Barclays takes a different approach in its latest prediction.

India, however, wants to keep importing oil from Iran, because Tehran offers discounts and incentives for them at a time when the Indian government is struggling with higher oil prices and a weakening local currency.

Iran's exports will fall to 1.1 million b/d in October, Platts Analytics projects.

Saudi Arabian Minister of Energy and Industry Khalid Al-Falih said the kingdom is boosting production and would supply refiners.

More news: Hamilton wins F1 race in Japan, challenger Vettel sixth

"India is continuing with its relationship with both its key energy partners Iran and the U.S.", a second source said. The friendship agreement came into effect in June 1957 and granted Iran economic and diplomatic privileges.

Comments