Economy

US Sanction Waiver for Iran Oil Imports Likely

US Sanction Waiver for Iran Oil Imports Likely”

Oil prices look set to stay strong for the rest of this year and in 2019 thanks to supply disruptions and as extra oil from OPEC fails to meet rising demand, a Reuters poll showed on Friday.

"The two leaders agreed that balancing the global oil market is essential to ensure access to reliable and affordable energy to people everywhere", it said.

The increase, if it can be pulled off, would be an incredibly rapid ramp up in output, up more than 1 million barrels per day (mb/d) from May levels.

Garbis Iradian, head of research for the Mena region at the Institute of International Finance, said near-term oil production growth from the U.S. and Canada may not be enough to offset supply shortfalls in Venezuela, likely losses from Iran, and the 1.4 million bpd growth in global demand for oil.

As Guyana inches towards a 2020 commencement of the exploitation of what has been determined to be a potentially fortune-changing oil find, some of the major players in the industry were discussing what is widely believed to be significant global movement towards a historic shift in the demand for oil and oil products driven by growth in the world's major markets.

The statement reported by Saudi media did not mention any intention by Saudi Arabia, the world's top oil exporter, to raise production to 2 million barrels per day. "It is expensive", the Saudi official told the paper.

"This is just simply not doable", said one senior Saudi oil official cited by the Journal.

Though the Opec didn't disclose country quotas in the recent announcement of 1bpd output hike, Bell sees there are a few countries with available capacity to raise production and any increase in production would be borne most significantly by Saudi Arabia, the UAE and Kuwait. The move is yet to be approved by other members of the Organization of Petroleum Exporting Countries and its allies, and some such as have said they aren't in favour. Price increases have also been driven by Trump's decision to withdraw from the Iran nuclear deal and reimpose trade sanctions there.

In total, Europe accounts for a fifth of Iran's daily 2.5m barrels of crude.

Greg McKenna, chief market strategist at futures brokerage AxiTrader said this week's crude price rises had "exhausted the bulls".

If Saudi Arabia were to respond to Trump's request, it would stretch spare production capacity to the limit, meaning that any supply outage could have an out-sized effect on oil prices.

The anonymous official made the comment to The Wall Street Journal Saturday, not long after US President Donald Trump claimed that the monarchy has agreed to raising the oil output to take on Iran and Venezuela. In the end, both sides were able to save face. In Libya, where a dispute over control of key ports has hindered output, the Arabian Gulf Oil Co. on Saturday halted 220,000 barrels a day of production, according to a person familiar with the outage. OPEC and Russian Federation reached a complicated agreement during the talks, with OPEC agreeing to pump more oil - but perhaps not as much as some had expected.



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