India's Iranian oil intakes jump to record high in July

06 August, 2018, 10:48 | Author: Billie Castillo
  • China rejects US demand to reduce Iran oil imports: report

Oil prices rose on Monday after Saudi crude production registered a surprising dip in July and as American shale drilling appeared to plateau.

Teams of US officials have been visiting capitals around the world to try to choke off sales of Iranian oil by early November, when USA sanctions are due to snap back into effect.

"Indeed, China could be motivated to import even more oil from Iran, as Iranian oil is displaced from European markets due to USA sanctions and will be marketed at a discount".

Saudi Arabia produced much less oil per day than expected, especially considering OPEC was supposed to be lifting barrel counts. That's helped limit a rally in global benchmark Brent crude, which is trading near $73 a barrel after falling 6.5 percent last month.

China has however agreed it will not increase oil imports from Iran, in a move which would directly challenge the USA blockade.

USA crude exports have been seesawing over the past month, falling 51 per cent in the week ended 27 July after an 84 per cent increase the week earlier, according to the latest Energy Information Administration Data.

"Crude oil exports from the five Persian Gulf Arab members of OPEC fell by about 1.1 million barrels a day last month, after surging in June", according to Bloomberg tanker tracking.

Other oil producing countries, led by Saudi Arabia, have vowed to increase production to cover the loss of Iranian oil.

Trump says Iran will decide whether to meet: ‘Doesn't matter' to me
Both diplomats spoke on condition of anonymity, as they were not authorized to brief the media on ongoing negotiations. Come August 6, Iran will no longer be able to buy or acquire US dollars.

However purchases from Iran could slow from now on; last month, state-run Hindustan Petroleum Corp Ltd (HPCL) was forced to cancel an Iranian oil shipment as insurers were not willing to provide cover for its two refineries for processing Iranian oil, sources with knowledge of the matter said.

Despite the rising prices on Monday, traders said one relief to markets was an announcement by Saudi Arabia at the weekend that oil shipments through the Red Sea shipping lane of Bab al-Mandeb had been resumed.

Earlier this year, Unipec had planned to trade up to 300,000 bpd of US crude oil by the end of 2018, which would have been triple the volume of USA crude oil that it traded last year, according to OilPrice.com.

Sinopec's trading unit, Unipec, has not booked new purchases of USA crude oil at least until October, one of Reuters' sources said.

Fears that Chinese demand could taper fueled the pullback Friday after state oil major Sinopec cut its purchases of US crude.

The strain between China and the USA derive from a similar attack by Trump, who levied a global tariff on steel and aluminum imports in March.

In January-July, India's oil imports from Iran rose by more than 17 percent to about 612,000 bpd, the data showed.

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