Buyers seek USA waivers to buy Iranian oil amid new sanctions

Buyers seek USA waivers to buy Iranian oil amid new sanctions

As that view hinges on Opec (Organization of the Petroleum Exporting Countries) reviving output and a limited impact on Iran from USA sanctions, prices could go even higher, it said, becoming the first Wall Street bank to suggest a return to $100.

Major companies, particularly in Europe, could see billions of dollars in commercial deals canceled because of the US decision to reinstall sanctions on Iran, though the ultimate impact remains unclear due to the possibility of renegotiations and exemptions, experts say.

New U.S. sanctions will include measures aimed at its oil and shipping sectors, with a six-month "wind down" period "to allow companies to end contracts, terminate business, (and) get their money out", according to the U.S. State Department. The EU had essentially cut its oil imports from Iran to zero the first time around, a scenario that probably won't be repeated again since the EU supports the nuclear agreement.

Iran, which pumps about 4 per cent of the world's oil, exports about 450,000 barrels per day to Europe and around 1.8 million bpd to Asia.

That's up 27 per cent since mid-2016 and means USA output is creeping ever closer to that of top producer Russian Federation, which pumps around 11 million bpd. In the following year, the Iranian supplies jumped to 27.2 MT to catapult it to the third spot. That's about 1 million barrels a day more than in early 2016.

Still, Iran will feel the pain from USA sanctions, even without cooperation from the other worldwide partners. Japan may follow suit.

Now that it's left the accord, the US intends to reimplement sanctions on Iran following certain "90-day and 180-day wind-down periods", according to Treasury Secretary Mnuchin. So far, France, Germany and the United Kingdom have all said they want to stay in the Iran deal.

South Korea's crude imports from Iran have already shrunk in 2018 to around 300,000 bpd, down from a 2017 average of more than 360,000 bpd.

S. African champions to play Barcelona to commemorate Mandela
He was the country's first head of state elected in a fully representative democratic election and played a prominent role in the fight against apartheid.

Outside OPEC, soaring US crude oil production could help to fill Iran's supply gap.

US light crude was up $1.94 a barrel, or 2.8% at $71.00 USA, after also hitting the highest intraday level since November 2014. It said Wednesday that it is studying the implications of the USA move and hopes the European Union will have a united position on the Iranian sanctions.

While oil prices have rallied, the share prices of oil-related firms have been more subdued.

Moreover, an increase in supply from Saudi Arabia, for instance, to offset the declines from Iran will also translate into a shrinking volume of spare capacity.

Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 90 days of credit for purchases, at least thrice the amount of time given by other producers. USA heating oil futures surged to $2.2258 a gallon, the highest since February 2015.

Ship insurance was a critical hurdle when sanctions were previously imposed on Iran because tanker operators couldn't obtain the level of cover that's considered standard across the oil industry.

Russian Federation and Saudi Arabia have agreed to a series of production cutbacks, while Venezuela, once one of the world's largest suppliers, has seen its production levels collapse.

Trying to ease market concerns, Saudi Arabia on Wednesday said it would work with other producers to lessen the impact of any shortage in oil supplies.

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