Govt allows state refiners to use Iran tankers, insurance for oil imports

Bonbast Website: Iranian Rial Hits Record Low at 128,000 to Dollar

Tokyo was forced to act after Donald Trump pulled the USA out of a 2015 global nuclear deal signed between Tehran and other major powers and reinstated some of its sanctions against Iran.

The ongoing trade wars between the United States and some of the world's biggest economies, including the European Union and China, could hurt the demand for oil if they aren't settled soon.

It's unclear, however, how much other countries will cut back on Iranian oil imports.

The Organization of Petroleum Exporting Countries and its allies agreed in June to increase combined output by 1 million barrels a day to meet consumer demand and prevent a sharp rise in prices.

India, Iran's top oil client after China, will finalise its strategy on crude purchases from Tehran after a meeting with top USA officials this week, a senior government official told Reuters last week.

Brent futures for November settlement traded 45 cents higher at $78.09 a barrel on the ICE Futures Europe exchange at 11:05 a.m.in London. The sanctions targeting oil sales will be effective from November 5, but buying activity seems to be slowing down already.

In total, crude and condensate shipments slumped by 755,000 barrels a day since April, the month before Trump announced the reimposition of sanctions.

According to Barclays bank, worries over supply issues are becoming more evident.

Considering the looming impact of the trade war between the United States and other major economies, including Iran, China and the European Union, OPEC's output witnessed an increase of 420,000 barrels a day from July. Additionally, Iraq's exports to the south hit record highs.

According to Hitesh Jain, analyst, commodities, India Infoline, Iran had produced around 3.8 million barrel per day in 2017 and had exported 2.4-2.5 million barrel per day.

Amid rising trade tariffs raised by Washington and Beijing, China's manufacturing activity grew at the slowest pace in more than a year in August, with export orders shrinking for a fifth month and employers cutting more staff, a private survey showed on Monday.

The reversal in oil prices from early July highs was triggered by easing threats of the tropical storm Gordon hitting the Gulf of Mexico.

"It isn't at all clear that such type of economic headwinds will topple oil prices", Innes said. This could mean that consumers in the U.S. could pay up to as much as $4 per gallon for unleaded gasoline.

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