Oil prices fell as U.S. sanctions against Iran waivers to eight importers

Vastavam web: Oil prices fell on Monday as the start to U.S. sanctions against Iran’s fuel exports was softened by waivers that will allow some countries to still import Iranian crude, at least temporarily. Front-month Brent crude futures were at $72.39 per barrel at 0142 GMT on Monday, down 44 cents, or 0.6 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures were down 53 cents, or 0.8 percent, at $62.61 a barrel. This came as traders cut their bullish wagers on crude futures to a one-year low by the end of October, the fifth consecutive cut during a month when prices posted their largest drop since July 2016, data showed on Friday. Prices have been coming under pressure since it became clear that Washington was allowing several countries to continue importing crude from Iran despite the sanctions, which officially started on Monday.

Washington has so far not named the eight, referred to as “jurisdictions”, a term that might include Taiwan which the United States does not regard as a country. China, India, South Korea, Turkey, Italy, the United Arab Emirates and Japan have been the top importers of Iran’s oil, while Taiwan occasionally buys Iranian crude, although it is no major buyer. “Iranian exports and production had been declining steadily…Iranian exports show a decline of more than 1 million barrels per day (bpd) as of October from May,” said Edward Bell of Emirates NBD bank. On the demand side, Bell warned that consumption may be slowing due to an economic slowdown, as seen in a sharp drop in refining profits.

Joint output from the world’s top producers – Russia, the United States and Saudi Arabia – in October rose above 33 million bpd for the first time, up 10 million bpd since 2010. In the Middle East, Abu Dhabi National Oil Company (ADNOC) plans to increase its oil production capacity to 4 million bpd by the end of 2020 and 5 million bpd by 2030, ADNOC said on Sunday, compared with current output of just over 3 million bpd.