India will buy nine million barrels of Iranian oil in November, in a signal the world's third-biggest oil importer will continue purchasing crude from the Islamic republic despite U.S. sanctions coming into force on November 4.
Two companies in India, a big buyer of Iranian oil, have ordered barrels in November, India's oil minister said on Monday.
The Indian orders have reportedly been placed by Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL).
Oil prices rose on Tuesday as more evidence emerged that crude exports from Iran, OPEC's third-largest producer, are declining before the imposition of new USA sanctions and as a hurricane moved across the Gulf of Mexico.
In May, Trump pulled the United States out of the Iran nuclear deal despite objection from the other signatories, the UK, Russia, Germany, China, and France, re-imposing sanctions lifted under the deal.
Brent crude, the global benchmark, was down $1.38 to $82.78 per barrel at 1041 GMT.
Alongside potential waivers on Iranian sanctions, oil supply is seemingly back on the rise with Libya recently boosting oil production to 1.25mbpd (200kbpd more than the September average).
The inaction by OPEC and Russian Federation at the end of September-and the growing evidence from tanker tracking data that Iran's oil exports have started to fall quicker than most market participants had been expecting-has emboldened bulls, and some analysts started to predict that the possibility of $100 oil as soon as year's end is not to be ruled out.
Indian Oil Minister Dharmendra Pradhan told reporters that New Delhi was discussing the issue of a waiver "with all the authorities concerned". And Saudi Arabia and OPEC and non-OPEC countries, they've produced 1.5 million barrels a day.
Oil also dropped as investors focused on rising output from other producers, such as top exporter Saudi Arabia, to compensate for lower Iranian supplies which have fallen further in October according to export data.
Further weighing on oil prices was "chatter that Saudi Arabia has replaced all of Iran's lost oil", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore. To this, taxes at the central and state levels are added, besides dealers' commission, to arrive at the retail price.
"The step taken by the government reverses the price deregulation of diesel and petrol and increases the likelihood that the government may ask upstream companies Oil and Natural Gas Corporation (Baa1 stable) and Oil India Limited (Baa2 stable) to share the fuel subsidy burden", the report added.
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