Markets

Rouhani Says US Pressure to Stop Iranian Oil May Effect Regional Exports

Rouhani Says US Pressure to Stop Iranian Oil May Effect Regional Exports

Traders in Asia are trying to gauge which way it will go when state-owned Saudi Arabian Oil Co., known as Saudi Aramco, publishes monthly official selling prices this week.

They had plateaued for several years, after plummeting in 2014. Sometimes as a "swing" producer, satisfying occasional gaps opened up by production shortfalls by major oil producers to stabilize the oil prices.

Second, the global oil market-now trading just below $80 per barrel-has tightened considerably in the past year, and could reach new heights in coming months.

"We'll need more oil down the road and there'll be nowhere to get it", said Flynn, of the Price Futures Group. Venezuela has lost close to 1 mb/d in the past two years, and could lose another 500,000 bpd over the next year. The latter have soared in the last two years to around 400,000 barrels per day in July, worth around $1 billion at current market prices. Trump's administration in early May said that it would renew US sanctions on Iran and has sought to reduce other foreign buyers' purchases of Iranian oil.

Iran announced on Sunday that it would permit private companies to export crude oil as Tehran attempts to thwart USA sanctions against the country's oil industry.

Iran is among the nations with the highest oil serves, along with Saudi Arabia, which is the world's leading exporter of oil.

Saudi Arabia is back in control of the oil market again. "Since Venezuela and Libya failed to produce, OPEC countries made a decision to increase their output by one million barrels to compensate", Sonatrach's CEO noted, adding: "This is why prices stand at the same level".




There's also a wild card here, namely domestic US production. "On balance, this leaves the oil market tighter than before, with less spare capacity".

If Trump's tweets are taken as policy, it means the usa is assuming a 2 million barrel-a-day increase is readily available from the Saudis, a relationship that has already been leveraged "to the maximum extent". But broadcasting its requests on Twitter with a number that stretches credibility opens a new chapter in U.S. -Saudi relations, Halff said.

"Refineries are going strong, and we've continued to see pretty robust inventory declines, and that suggests that as we move forward, this market is going to be a little less supplied than we would think, " Mr Melek said. But in practice, switching US production back on has proven tougher than anticipated. Prices to (sic) high! If confirmed by government data Thursday, that would be the seventh consecutive drop. "They're not used to this kind of public messaging". However, the problem is that only eight members out of 24, including Russia, Saudi Arabia, the United Arab Emirates, Kuwait, Oman, Algeria, can do this in a timely manner. They may well open the spigots to stabilize prices. An increase in global production would typically be expected to ease prices.

And what of President Trump? "Oil prices are artificially Very High!" Trump has imposed tariffs on steel and aluminum in response to what he calls unfair trade practices from Europe, Canada, and other allies around the world, who have responded with retaliatory sanctions in kind.

Production at Syncrude Canada's 360,000 barrels per day (bpd) oil sands facility near Fort McMurray, Alberta, was hit by a power outage last month and is likely to remain offline through July, helping drain USA inventories.

China's customs agency said on its website that Chinese tariffs on US goods would immediately be implemented in retaliation.


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