Published: Fri, November 09, 2018
Worldwide | By Jermaine Blake

Crude worldwide plunges after questions about oil demand

Crude worldwide plunges after questions about oil demand

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

S&P Global Platts reported on Tuesday that South Korea would be able to take around 4 million barrels a month of Iranian crude and condensate under a United States sanctions waiver. Perhaps, the trade war sentiment and Iran sanctions waivers are denting the bullish oil sentiment.

Trading sources said several Asian oil importers were looking to increase their orders for Iranian oil soon.

"After extensive consideration, the United States has provided an exception under the Iran Freedom and Counter-Proliferation Act to allow #Afghanistan to continue to import petroleum products from Iran and for shipment of non-sanctionable goods through #Chabahar Port for Afg", tweeted Bass.

"Iran's situation is better than pre-2016 because of high oil prices and the fact that the USA is isolated this time", the report by Reuters quoted a European diplomat as saying.

The move by the Donald Trump administration is considered as an endorsement by Washington of India's major role in the development of the port on the Gulf of Oman, which is of enormous strategic importance for the reconstruction of war-torn Afghanistan. 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.

However, Washington granted temporary waivers to eight countries, including China and India, the biggest purchasers of Iran's crude.

New Delhi has poured $2 billion into development in Afghanistan since the 2001 US -led overthrow of the Taliban government.

USA crude rose 28 cents to US$62.49.

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The API reported a draw in gasoline inventories for week ending November 2 in the amount of 1.2 million barrels.

In 2017-18, India imported 22.6 million tonnes of oil from Iran.

Banking sources said any Korean payments for Iranian oil would need to be made in its won currency.

"Any of these waivers based payments for the oil by the exempt countries must go into escrow accounts".

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

Citing officials and analysts, the news agency said while the U.S. sanctions will probably trigger recession in Iran next year, they will not lead to an economic meltdown.

Iran's oil exports rose sharply after the previous round of sanctions were lifted in early 2016.

Italy and Greece have completely suspended purchases in recent weeks.

US bank J.P. Morgan said "part of the recent sell-off in oil was due to excessive crude in the physical markets.from elevated production from OPEC whilst Iranian supply was still in the market despite reduction in reported exports".

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