Published: Wed, October 10, 2018
Money | By Armando Alvarado

Saudi Arabia to supply extra oil to India as Iran sanctions loom

Saudi Arabia to supply extra oil to India as Iran sanctions loom

Washington's sanctions, targeting Iran's crude oil exports, are to come into force from November 4.

U.S. crude was down 0.7 percent at $73.80 a barrel.

The US administration is "prepared to work with countries that are reducing their imports on a case-by-case basis", the official added.

But the actual volumes imported may be far less as companies like Reliance Industries have totally stopped buying oil from Iran and others too are scaling it down in hope of winning a sanction waiver from the US.

The country previously held oil in storage at Dalian during the last round of sanctions in 2014 that was later sold to buyers in South Korea and India.

"Chatter that Saudi Arabia has replaced all of Iran's lost oil" is weighing on prices, said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore. Reuters had reported on Friday that India would buy 9 million barrels of Iranian oil next month.

USA sanctions targeting Iran's crude oil exports come into force from November 4, with Washington ratcheting up the pressure on governments and companies around the world to slash their Iranian oil imports to zero.

Indian Oil Corp (IOC) Chairman Sanjiv Singh said his company is among the two which have placed order for November.

Behold! The New Pixelbook Pen. Now In Pixel Slate Color
Under the hood is a Qualcomm Snapdragon 845 SoC with an octa-core CPU, paired with 4GB of RAM and 128GB storage. The phone will likely come in two sizes - a 5.5-inch base model and the larger six-inch Pixel 3 XL .

The two countries had later informed the United States about the decision.

"What the Saudis had been supplying the market with, were not from Riyadh's spare capacity but from tapping its oil stocks", Zanganeh said, according to the website.

With the European Union considering the creation of a "special objective vehicle" before November to facilitate trade with Iran, India hopes to find a way to settle payments to Tehran. Prices are up six cents more than a month ago and 41 cents more than this time previous year. While top officials in the Trump administration, including President Trump himself, have vowed to crack down on global business dealings with Iran, some officials have been working to lessen the severity of these sanctions through waivers and other concessions that would help Iran's ailing economy.

"Any country that makes such claims. just wants to display its support for the USA sanctions against Iran", Zanganeh was quoted as saying.

"In particular, both India and China continued to import crude from Iran, even though they had to cut down volumes significantly". "So let us see how it evolves".

Besides, New Delhi sought to get around the restrictions by supplying goods including wheat, soybean meal and consumer products to Iran in exchange for oil.

Drillers cut two oil rigs in the week to October 5, bringing the total count down to 861, energy services firm Baker Hughes said in its weekly report on Friday.

Besides blocking of banking channels from November, the absence of payment mechanism may pose a challenge to the transportation of the oil as Iranian crude is bought on a CIF basis and shipped on Iranian tankers.

Like this: