Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, reported Reuters, as buyers sought alternatives ahead of USA sanctions on Iran that take effect on November 4.
Oil has rallied this year on expectations the sanctions, coming into force on November 4, will strain supplies by lowering shipments from Iran, OPEC's third-largest oil producer.
Distillate stockpiles, which include diesel and heating oil, fell by 2.7 million barrels, versus expectations for a 2 million-barrel drop, the EIA data showed. In fact, Saudi Arabia said they are not aware of any refiner that needed oil and was not able to obtain it. So far, the Bureau of Safety and Environmental Enforcement reported Monday, more than 19 percent of oil and 11.09 percent of gas production capacity in the Gulf of Mexico have been shut in, and more will likely follow ahead of the hurricane. He further added that Saudi Arabia representatives have been claiming that they are able to balance Iran's losses under the USA pressure.
Some 44 percent of the oil from Iran that arrived in India last month was initially planned to arrive in August, according to the tanker data and officials at two Indian state-run refiners, Reuters reports. As mentioned in yesterday's daily update, October exports have fallen to around 1M barrels a day (from a peak of 2.5M earlier this year) according to tanker and industry sources. "If it were not for the trade dispute, the oil market probably would have kept its momentum on lingering supply risks".
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Crude oil prices are up today.
Sourcing from Iran increased to 12.7 MT in 2015-16, giving it the sixth spot.
Venezuela is India's fourth largest supplier with 15.5 MT during April-January, followed by Nigeria with 14.9 MT, the minister further said. However, oil market basics do not point out that this demand is apparent.
A drop in USA oil production this week supported prices. Also, Tehran is open to accepting rupee payment for oil and may use the money to pay for equipment and food items it buys from India. Brent crude was increased by 45 Cents or 0.5% and was at $84.36 a barrel.
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