Oil rises to US$73 on report of 2019 output cut talks

Forty years of American hostility’ Iran releases video responding to new US sanctions

Forty years of American hostility’ Iran releases video responding to new US sanctions

Landlocked Afghanistan also has few better options for importing petroleum products than Iran for the time being.

The U.S. government's decision to grant sanctions to some top buyers of Iranian oil, including India, China and South Korea, and the very likely scenario of lower demand for crude due to the impact of the trade war have significantly eased worries about any short supply in the market. In turn, the U.S. would give a waiver to India to continue the import of Iranian oil in progressively lesser quantities for six months. In October, OPEC's crude production hit the highest since 2016 and Russian Federation hiked its output to a record of nearly 11.41 million barrels a day.

JP Morgan said "the lack or difficulty in acquiring shipping insurance will help in reducing exports quickly as they did during last worldwide sanctions".

What Happened: OPEC could consider potential oil production cuts in 2019 at its next meeting to respond to expected spikes in USA production in the second half of 2019, US sanctions waivers, falling oil prices and potentially slower global growth, internal OPEC sources have said, according to a November 7 Reuters report. In addition, having initially talked of cutting Iranian oil shipments to zero, Washington gave waivers to eight customers, raising the prospect of more Iranian oil in the market than expected.

"Any serious discussion will be toward the December meeting", this source said.

"It will be a hard period but Iran's economy will withstand it for various reasons", a second diplomat told Reuters, "including (the fact of) Russian Federation being under (US and EU) sanctions, Saudi Arabia having its own financial and political issues, and (trade war) between China and the United States". Fund managers have started to establish short positions betting on further price falls (tmsnrt.rs/2P8LQ1S).

India is the world's third-biggest oil importer. The granting of the waivers and pledges from Saudi Arabia to fill any supply gaps has since led oil prices to hover $75 a barrel.

Two Chinese sources familiar with the matter said the country would be allowed to buy 360,000 bpd of Iranian crude during the exemption period. The second batch came into effect on November 6, hitting oil and shipping sectors. USA sanctions had been lifted under the auspices of the 2015 Joint Comprehensive Plan of Action (JCPOA or, more simply, the Iran nuclear deal) negotiated by the Obama administration along with China, France, Russia, the U.K., Germany, and the European Union.

The consultancy has based its forecast on assumptions of the remit given to the countries that have procured waivers from the U.S. administration.

"Oil revenues might decline but (they) will still be enough to run the country", said an official involved in Iran's global commerce.

Still, while the U.S. clampdown will probably trigger recession in Iran next year, economic meltdown should be avoided, with a reduced but still significant volume of oil exports continuing, a Fitch solutions analyst said.

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