Iran to continue exporting crude despite fresh USA sanctions

Trump's Blow to Iranian Oil Sparks Curious Price Divergence

Trump's Blow to Iranian Oil Sparks Curious Price Divergence

Commodity traders Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and pass $100 in early 2019, as markets tighten once USA sanctions against Iran are fully implemented from November.

"I do not influence prices", Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.

"We have the consensus that we need to offset reductions and achieve 100 per cent compliance, which means we can produce significantly more than we are producing today if there is demand", Al Falih said.

Global benchmark Brent crude for November delivery was up at 79.40 dollars a barrel.

Tehran had previously said no OPEC member was allowed to grab market share from rivals, such as Venezuela or Libya, whose production had declined due to unrest or a lack of investment.

When Trump in May announced plans to reimpose sanctions on Iran's oil exports, the market estimated a cut of about 300,000 to 700,000 barrels a day, according to Trafigura's Luckock.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!" he tweeted on Thursday.

But Mr Trump suggested on Twitter he will zero in on Iran, when he posted: "I will chair a United Nations Security Council meeting on Iran".

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"The market does not have the supply response for a potential disappearance of 2 million barrels a day in the fourth quarter", Mercuria Energy Group Ltd.co-founder Daniel Jaeggi said in a speech at the S&P Global Platts Asia Pacific Petroleum Conference, knows as APPEC.

The OPEC oil cartel raised its global production forecast on Sunday based on higher-than-predicted USA output in a report outlining a long-term rise in net demand, particularly in developing countries.

The market was "increasingly concerned about dwindling (U.S.) inventories", ANZ bank said on Monday.

The OPEC cartel in December 2016 concluded an agreement with non-member states - including Russian Federation - to reduce output in order to arrest sliding prices.

That equates to an increase of about 1 million bpd, but the latest figures show they are some way from achieving that target.

In addition to USA sanctions cutting Iranian supply, the world is also dealing with a decline in Venezuelan oil production due to an economic crisis in the Latin American nation, according to Trafigura's Luckock.

The OPEC/non-OPEC monitoring committee next meets on November 11 in Abu Dhabi, followed by a full OPEC gathering at its Vienna headquarters on December 6-7.

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