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Saudi Arabia unable to replace lost Iranian oil - Iran’s oil minister

10 October 2018

"Refiners have placed November nominations to lift 1.25 million tonnes (about 9 million barrels) of oil from Iran", a source has told Reuters.

The details provided by Refinitiv Eikon showed the Islamic Republic exported 1.1 million barrels per day (bpd) of crude last week.

Oil dropped below $83 a barrel on Monday, pressured by expectations that some Iranian oil exports will keep flowing after the US reimposes sanctions, easing a strain on supplies. He said that India has its own energy requirements to fulfil.

On November 4, a second round of US sanctions against Iran will target the oil industry, and impose penalties on oil companies, refineries, insurers and transport companies dealing with Iran.

India will defy USA sanctions and continue importing oil from Iran after a November 4 deadline, easing concerns over the country's energy security but setting up a possible showdown with Washington.

"There is growing concern that suppliers such as Saudi Arabia and Russian Federation will struggle to compensate for potential production declines from Iran and Venezuela, which has supported oil prices in today's trading session", said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

The IMF downgraded the economic growth forecasts for the whole region of the Middle East, North Africa, Afghanistan, and Pakistan, compared to the April edition of the World Economic Outlook, reflecting "to an important extent the worsening of growth prospects for Iran, following the reimposition of United States sanctions", the IMF said in the October outlook.

China has pledged to ignore USA sanctions and keep buying Iranian oil.

U.S. sanctions against Iran will kick in from 4 November, which will block payment routes.

Refiners have already announced purchases of oil from Iran for November at levels nearly similar to those in October, despite the start of the sanctions on the 4 November. The global benchmark hit a four-year high of $86.74 last week but slipped as low as $82.66 on Monday.

Worldwide benchmark Brent crude oil futures LCOc1 were at $83.26 per barrel at 0352 GMT, down 90 cents, or 1.1 percent, from their last close.

Meanwhile, the International Court of Justice ordered the USA on Wednesday to ease some sanctions against Iran, including those related to the supply of humanitarian trade, food, medicine and the safety of civil aviation.

The EIA reported crude supplies rose by 8 million barrels for the week ended September 28 - the largest weekly climb year to date.

The International Monetary Fund downgraded its global economic growth forecasts for 2018 and 2019 on Tuesday, potentially tempering demand for oil and its products. He added that state-run oil companies must also look at taking measures to ease the burden of consumers.

"In effect, the government has asked the OMCs to sell petrol and diesel at subsidized prices, for which they will not be reimbursed", the report said.

Saudi Arabia unable to replace lost Iranian oil - Iran’s oil minister