India to Continue Iranian Oil Imports after US Sanctions

US challenges International Court of Justice ruling on Iran sanctions regime

In November, the U.S.is set to introduce the second phase, sanctioning Iranian oil and gas as Trump follows through on his promise to put maximum pressure on the country after the USA withdrawal from the 2015 nuclear deal in May. On Wednesday, Brent hit its highest price since late 2014, at $86.74.

In 2015, the administrations of former President Barack Obama and Iranian President Hassan Rouhani forged an unprecedented deal to lift extensive US sanctions on Iran in exchange for the country to agree to restrict its nuclear activities, which it maintained were strictly for peaceful purposes. However, the country's refiners since June have cut purchases of Iranian crude ahead of U.S. sanctions.

West Texas Intermediate (WTI) for November delivery on Friday rose to US$74.34 a barrel on the New York Mercantile Exchange. OPEC's hesitance to drive prices lower, along with supply drops from Iran on the order of 1.5 million barrels a day, made for bullish sentiment at the meeting of the Asian oil industry in Singapore.

In May, Trump pulled the U.S. out of the Iran nuclear deal despite objection from the other signatories, the UK, Russia, Germany, China, and France, re-imposing sanctions lifted under the deal.

All told, the Iran situation (along with the US trade war with China) is largely responsible for a 15-20 percent rise in oil prices since mid-August, despite the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russian Federation repeatedly insisting they can ramp up to compensate for the loss of Iranian crude exports - and despite Friday's news that India will buy 9 million barrels of Iranian oil in November.

Hearings alleged violations of the 1955 Treaty of Amity Iran vs the U.S. in The Hague
Crude rises as alarm bells sound over supply crunch

Overall US exports also fell 917,000 bpd to 1.7 million bpd in the last week of September, according to the Energy Information Administration, as a stronger US dollar and Brent's premium to WTI fell, making US crude less affordable.

Prices might hit US$100 this autumn as USA pressure stymies exports from Iran, OPEC's No. 3 producer, Russian Minister of Energy Alexander Novak said. The deal was struck as oil prices began to climb towards $80 per barrel.

India had planned to import about 25 million tons of crude oil from Iran in the current fiscal, up from 22.6 million tons imported in 2017-18. The Indian oil refiners buy Iranian crude at $3-5 a barrel discount compared to that from other parts of Middle East.

"Iran is attempting to interfere with the sovereign rights of the United States to take the lawful actions necessary to protect our national security, and Iran is abusing the ICJ for political and propaganda purposes", Pompeo told reporters.

"The Saudis won't flood the market and they don't want to see it oversupplied", said Giovanni Staunovo, an analyst at UBS Group AG.

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