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2018-06-29 10:45:00

U.S. - IRAN SANCTIONS FOREWER

U.S. - IRAN SANCTIONS FOREWER

WSJ U.S. oil prices jumped more than 3% to above $70 a barrel Tuesday after a senior official said Washington expects all countries to cut oil imports from Iran to zero by November or risk sanctions.

Light, sweet crude for July delivery ended 3.6% higher to $70.53 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 2.1% to $76.31.

Iran exports more than 2 million barrels a day of oil. President Donald Trump in May withdrew from a nuclear deal with Iran and reimposed sanctions that seek to force companies not to buy any Iranian oil.

The State Department official who spoke Tuesday said the U.S. doesn't plan to issue any temporary waivers to nations for a few months time, even if they are showing efforts to cut their purchases gradually, noting the U.S. wants Iran shipments to be "zero" by Nov. 4.

"Basically what the government is saying is they're going to apply various financial sanctions and/or in other ways make it very unattractive for anyone to buy oil from Iran," said Alan Levine, chief executive at Powerhouse in Washington, D.C. "When that news hit the market, crude rallied.

The prospect of plunging Iranian exports outweighed early market concerns on a report from Bloomberg that Saudi Arabia planned to pump a record amount of crude in July.

"It's a story of the shock absorbers at this point," said Helima Croft, global head of commodity strategy at RBC Capital Markets. "The more the Saudis bring on now, the less that's left to deal with any other crisis. And we have proliferating crises."

One such area of concern is Libya, with oil exports threatened by rising political tensions.

'You have no margin for error if you're going to be this aggressive on Iran with the Libyan backdrop," Ms. Croft said. "In the hunt for the additional barrels, the shelves are going to be pretty empty."

Analysts said the upward move in oil prices wasn't driven solely driven by the Iran news, pointing to expectations for large weekly drawdowns in U.S. oil inventories and a continued shutdown of an important oil-upgrader facility in Canada. That could lead to bigger inventory drawdowns in the weeks to come.

On Friday, oil prices closed their biggest one-day jump since 2016, after OPEC agreed to raise production levels but specified that members would focus on easing overcompliance with cuts, rather than raising the output caps set over a year ago.

"That muted message from OPEC put upward pressure on prices. That caused the Saudis to start ramping up their own rhetoric," Bob McNally, president of Rapidan Energy Group, a consulting firm.

The original OPEC deal, which started in January 2017, helped to boost crude prices by more than 40%, with Brent temporarily climbing above $80 a barrel last month. Those higher prices, coupled with geopolitical risks to supply and shrinking global oil inventories, prompted Saudi Arabia -- the de facto head of OPEC -- and Russia to push for an output increase ahead of key meetings in Vienna over the weekend.

"Yet, details over how the supply increases will be allocated are scant, " said Stephen Brennock, analyst at brokerage PVM Oil Associates Ltd. "This has sparked uncertainty as to whether the ramp-up in production will in practice reach anywhere near the one million barrels-a-day figure," he added.

Investors on Wednesday will watch for weekly U.S. oil inventory data from the Energy Information Administration. A Wall Street Journal survey of analysts and traders expects, on average, that crude oil stockpiles declined by 2.8 million barrels last week.

The American Petroleum Institute, an industry group, said late Tuesday that its own data for the week showed a massive, 9.2-million-barrel decrease in crude supplies, a 1.2-million-barrel rise in gasoline stocks and a 1.8-million-barrel increase in distillate inventories, according to a market participant.

Oil market observers are now awaiting weekly U.S. inventory data later Tuesday from the American Petroleum Institute, an industry group, and official data from the Energy Information Administration Wednesday.

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Earlier: 

 Iran Sanctions
2018, June, 27, 10:50:00

U.S. - IRAN SANCTIONS

ARAB NEWS - The United States warned countries that they must stop buying Iranian oil before Nov. 4 or face a renewed round of American sanctions.

 Iran Sanctions
2018, June, 8, 12:55:00

VENEZUELA IRAN SANCTIONS

BLOOMBERG - Venezuela wrote to fellow OPEC members urging them to unite against U.S. sanctions, echoing a similar letter from Iran, according to people with knowledge of the matter.

 Iran Sanctions
2018, June, 4, 13:45:00

THE DRAMATIC U.S. GOVERNMENT

PLATTS - "Japanese companies don't want to stop imports suddenly," he said, adding the US position needed clarifying. "The situation in the US government is drastically changing every day."

 Iran Sanctions
2018, June, 4, 13:35:00

IRAN'S OIL EXPORTS 2.7 MBD

SHANA - The country exported 2.4 mbd of crude oil and 300,000 b/d of gas condensate, ultra light crude oil, during May.

 Iran Sanctions
2018, June, 4, 13:30:00

IRAN NEEDS SUPPORT

SHANA - The Iranian Minister of Petroleum further stressed that should the sanctions lead to any reduction in the oil market share of the I.R. Iran, Tehran, once the illegal limitations were resolved, reserves the right to return to its oil market share in the shortest possible time and resume its normal production-level and that it would not accept any limitations in that regard.

 Iran Sanctions
2018, May, 30, 13:45:00

INDIA IGNORES SANCTIONS

BLOOMBERG - India, a long-time buyer of oil from both Iran and Venezuela, only complies with United Nations-mandated sanctions and not those imposed by one country on another, said foreign minister Sushma Swaraj at a press conference in New Delhi on Monday.

 

 Iran Sanctions
2018, May, 14, 11:35:00

GLOBAL IRAN SANCTIONS

PLATTS - Trump's plan to leave the Iran nuclear deal and reimpose sanctions could have major impacts for global oil, natural gas, metals and petrochemical markets.

Tags: USA, IRAN, SANCTIONS, OIL, PRICE