Published: Mon, October 08, 2018
Business | By Eloise Houston

US Actively Considering Waivers on Iran Oil Sanctions

US Actively Considering Waivers on Iran Oil Sanctions

LONDON-Oil prices started the week under pressure, amid reports the US could grant waivers to some buyers of Iranian crude when oil sanctions on the Islamic Republic go into effect next month. Reuters had reported on Friday that India would buy 9 million barrels of Iranian oil next month.

Iran may indeed have not cut production yet to match the rate of decline in its exports, as the country appears to be storing more oil on ships as it did during sanctions that applied until the 2015 nuclear deal.

"In particular, both India and China continued to import crude from Iran, even though they had to cut down volumes significantly".

In the previous round of sanctions from 2012 to 2015, India continued to buy Iranian crude although it had to cut purchases significantly to protect its wider exposure to the US financial system.

He said Indian refiners had started importing oil from the United States but purchases were constrained by USA infrastructure.

Petroleum Minister Dharmendra Pradhan said two state-owned oil refiners, Indian Oil Corporation and Mangalore Refinery and Petrochemicals, had signed contracts to import 1.25 million tonnes of Iranian oil next month, Mint newspaper reported.

Pradhan reportedly said Monday that India does not know if it would get a waiver from the U.S.

"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.

Some Indian refiners recently made payments for Iranian oil in rupees, and could use the same mechanism in future to settle trade with Tehran if no other alternatives were found, state-run Indian Oil Company (IOC) Chairman Sanjiv Singh said.

Opec accounts for around 40% of the global production.

Global benchmark Brent crude slid below $83 per barrel early in the session, partly on concerns the U.S.

Reports about falling Iranian exports of oil and condensate abound, but there is one important detail: usually, these are reports about tracked tankers carrying Iranian oil and condensate. Oil dropped to around $83 a barrel on Monday. To this, taxes at the central and state levels are added, besides dealers' commission, to arrive at the retail price.

On Monday, petrol and diesel were selling at Rs 82.03 per litre and Rs 73.82 per litre, respectively, in New Delhi.

"In effect, the government has asked the OMCs to sell petrol and diesel at subsidized prices, for which they will not be reimbursed", the report said.

Iran has warned that if it were not able to export its crude oil through the Strait of Hormuz, no other country would be able to do so, threatening to block the strategic strait.

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