USA warns against allowing Iranian tankers to port — Global Geopolitical Series

Iran’s Economy Minister Farhad Dejpasand

Oil prices slipped yesterday as concerns mounts that an economic slowdown may curb fuel demand growth overshadowed the reintroduction of sanctions on Iran.

U.S. crude futures for December settlement were trading at $61.90 per barrel in early NY business, down from $66.34 per barrel a week earlier.

Brent futures for January settlement edged up 15 cents to $70.80 a barrel on the London-based ICE Futures Europe exchange.

US sanctions have failed so far to shut down Iranian oil exports after Washington granted waivers to eight buyers of Iranian crude.

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".

China and India were the largest markets for Iranian crude before the onset of sanctions and will remain such for the upcoming six months. However, oil markets were held back somewhat after the United States became the world's top crude producer as its output hit record levels. To put that in context, the BP Statistical Review of World Energy 2018 puts global daily crude production at 92.6 million barrels per day for a year ago, so the increase is meaningful. Russia's TASS news agency reports that Russian Federation and Saudi Arabia are in bilateral talks to orchestrate another round of output cuts when producers meet next month. "Six months from now, the USA will be producing more crude oil than the unverified sustainable production capacity of Saudi Arabia".

A barrel of United States light crude oil, which hit a near four-year high of $76.41 on 3 October, was today trading as low as $60.06, representing a drop of 21%.

In the United States, crude production increased to 11.6 million barrels per day last week, the highest level on record, according to Energy Information Administration data. The EIA expects output to break through 12 million bpd by mid-2019, largely thanks to a surge in shale oil production. On Wednesday, oil slipped after USA crude output hit another record and domestic inventories rose more than expected. "We have worked with the Saudis, the Emiratis, and other producers to make sure production is up so that historic buyers of Iranian oil are not disadvantaged", he added.

Iraq, the second-largest producer within the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, is targeting production capacity of 5 million bpd in 2019, up from 4.6 million bpd now, Oil Minister Thamer Ghadhban said on Tuesday.

More U.S. oil will likely come. Pressure from the U.S.to lower prices probably will decrease now that the nation's midterm elections are over, Saxo Bank's Hansen said.

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