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Oil climbs on more evidence of falling Iranian crude shipments

Oil climbs on more evidence of falling Iranian crude shipments

Mubasher: Oil prices on Tuesday rose as more evident indications of declining crude exports from Iran emerged in the run-up to the reinstatement of US sanctions against Tehran.

Moreover, the rising prices were also ascribed to a hurricane that moved across the Gulf of Mexico.

By 8:12 am, Brent crude futures rose 0.43% to $84.27 per barrel (pb), while US Nymex futures jumped 0.47% to $74.64 pb.

In the first week of October, Iran’s crude exports fell further, as the oil-rich nation’s shipments were 1.1 million barrels per day (bpd) during the said week, Refinitiv Eikon data revealed.

In addition, an industry source told Thomson Reuters that early October exports were below 1 million bpd. This is way down from at least 2.5 million bpd last April before President Donald Trump pulled Washington from the 2015 nuclear accord with Iran, re-imposing thereby sanctions against Tehran.

Importers started to look for alternatives before the US sanctions against Iran take effect on 4 November, a challenge for members of the Organization of Petroleum Exporting Countries (OPEC) as they seek to compensate the resulting shortfall.

Last week, Saudi Arabia, OPEC de-facto leader, unveiled plans to ramp up oil production next month to a record high of 10.7 million bpd.

However, the claim was met with criticism from Iranian Oil Minister Bijan Zanganeh on Monday, who regarded it as “non-sense.”

“Iran’s oil cannot be replaced by Saudi Arabia nor any other country,” Zanganeh said on Monday, as shown on his ministry’s website.

Moreover, oil firms operating in the Gulf of Mexico slashed 19% of output as Hurricane Michael headed towards the states located in the east of the Gulf, including Florida.

This came amid projections that the hurricane would be ranked as Category 3 with sustained winds of 111 to 129 miles per hour (mph) (178 to 208 km per hour), stirring heavy seas for producing areas.

If proved accurate, the hurricane would be far largely from key producing assets in the Gulf, yet any change of its course could spread the impact, according to analysts.

That said, global trade tension and import tariff hikes still threatened commerce at the time when emerging markets are struggling with tighter financial conditions and capital outflows. This led the International Monetary Fund (IMF) to lower its forecasts for economic growth for this year and the year ahead.