Oil rises ahead of renewed United States sanctions against Iran

Oil rises ahead of renewed United States sanctions against Iran

Oil rises ahead of renewed United States sanctions against Iran

Just when you thought the renewed sanctions on Iran were already priced into the crude oil market, there are signs today that this may not be the case.

Iran's fleet of very large crude carriers, or VLCCs, and Suezmax tankers - the largest that can fit fully-laden through the Suez Canal - has always played an important role in delivering Iranian crude to customers, but it is increasing as insurers and worldwide shipping companies react to the sanctions snap-back.

According to Bloomberg, Beijing has declined a request by US envoys to stop importing crude oil from Iran.

Saudi Arabia Reduced Oil Production in July

Indian refiners may also be seeking alternative suppliers as they may be compelled to cut purchases from Iran.

So far, none of the countries within OPEC+, which accounts for more than half of the world's oil output, have signaled plans to leave the alliance.

"Anyone doing business with Iran will NOT be doing business with the United States", he added.

Universal's Cowboy Ninja Viking Has Delayed Production Indefinitely
Universal Pictures has announced they have indefinitely delayed Chris Pratt's Cowboy Ninja Viking . The film, based on a popular graphic novel, was set to be released on June 28, 2019.

These sanctions will severely limit Iran's ability to export oil. However, despite EU's move, German auto and truck maker Daimler said it has dropped its plan to expand its operations in Iran. Under the previous sanctions on Iran, all crude deliveries from Iran to Turkey were made on ships belonging to NITC. The Modi government, in fact, doubled the import duty on 328 textile goods to 20 per cent, to curb the imports from China. Global oil demand continues to be robust on the back of strong economic growth. This problem is compounded by the fact that a number of oil producers are facing their own share of political turbulence.

But new data released on Monday showed Saudi Arabia's oil production fell in July by 200,000 bpd from the month earlier.

"You can not order 2 million barrels like ordering a coffee somewhere", Beat Wittmann, a partner at financial consultancy Porta Advisors, told CNBC recently.

Student Poses with Alligator for Graduation Photos
Gator Country Rescue is a 15-acre preserve that is well-known for being a safe haven for alligators and several other reptiles. Reactions to the photos - both positive and negative - have inspired Noland to continue her mission to educate the public.

Analysts have predicted the sanctions could put more than two million barrels per day at risk. OPEC and Russian Federation reported an increase in their output by 300,000 and 150,000 barrels per day in July, respectively.

Finally, Iran has threatened to close the Straits of Hormuz - a vital oil transportation choke point. Saudi Arabia had temporarily halted shipment through the lane after two oil tankers were attacked.

The closure or even impairment of transportation in either of these oil choke points would have a potentially catastrophic effect on the oil market.

U.S. sets date for additional $16bn in tariffs on China products
The Semiconductor Industry Association expressed disappointment at USTR's decision to keep the sector on the tariff list. The Trump administration has finalized a new round of 25 percent tariffs on an additional $16 billion in Chinese imports.

"With global demand remaining healthy and the global heatwave increasing oil demand, I think prices will remain well-supported in the near term", Hussein Sayed, chief market strategist at FXTM, said. Accordingly, oil price may stay calm in the short run but the sanctions on Iran will light a fire under oil prices going forward.

Related news