International Olympic Committee signs up United States crude in 1st ever term-tender deal

Prepare for $90 oil after sanctions against Iran take effect – analyst

China Stringer Network Reuters

An Iranian newspaper reported that Foreign Minister Mohammad Javad Zarif said a US plan to reduce Iran's oil exports to zero will not succeed. A second tranche coming into effect on November 5 will cover Iran's oil sector. US West Texas Intermediate (WTI) crude futures were at $69.35 a barrel, up 18c.

The US, which in May pulled out of a landmark nuclear deal and said sanctions will be re-imposed on Iran within 180 days, has threatened to cut off access to the American banking system for foreign financial institutions that trade with Tehran.

The agency slightly increased its expectation for 2019 production growth to 1.02 million bpd from 1.01 previously. This threatens supply. On Wednesday, China said it will impose tariffs of 25 percent on a further $16 billion in USA imports.

"While concerns of a supply disruption from Iran due to the resumption of US sanctions is buoying prices, the US-China trade row is keeping oil from rising higher".

Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (Opec).

The move is likely to make a severe impact on global crude supply.

Shipments into the world's biggest importer of crude last month rose to 8.48 million barrels per day from 8.18 million bpd a year earlier and June's 8.36 million bpd, customs data showed.

Brent for October settlement traded at $74.53 a barrel on the London-based ICE Futures Europe exchange, down 12 cents.

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Anas Alhajji, an energy economist based in Dallas, Texas, told Xinhua that "Unlike the past, USA weekly crude oil inventories have become extremely sensitive to U.S.net imports, making short term oil prices more volatile".

On Wednesday, the U.S. Energy Information Administration reported a surprise build of 3.8 million barrels in commercial crude oil inventories. Among the goods affected is crude oil and other petroleum products.

The Vienna conference on 23 June 2018 decided the oil-producing would endorse a normal output rise of one million barrels crude oil each day.

Indian Oil agreed to buy 6 million barrels of US crude through the term-tender, taking its American crude purchases to 16 million barrels in total since April.

This mostly impacts demand for power fuels such as thermal coal and natural gas.

International Olympic Committee will buy 2 million barrels of Mars oil in November, a combination cargo containing 1 million barrels each of Eagle Ford and Mars in December and 2 million barrels of Louisiana Light Sweet (LLS) in January, Sharma said.

State-run refiner Indian Oil Corp., which had been buying USA crude in the spot market, signed a term tender to purchase American oil for delivery every month between November and January, according to Finance Director Arun Kumar Sharma.

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