Oil prices fall as US grants Iran sanction waivers to major importers

Oil markets have been preparing for the US sanctions on Iran for months. Above, gas flares from an oil production platform at the Soroush oil fields in the Arabian Gulf, south of Tehran. (Reuters)
Updated 05 November 2018
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Oil prices fall as US grants Iran sanction waivers to major importers

  • The US said on Friday it will temporarily allow eight importers to keep buying Iranian oil.
  • Oil markets have been preparing for the US sanctions on Iran for months

SINGAPORE: Oil prices fell on Monday as the start to US sanctions against Iran’s fuel exports was softened by waivers that will allow major buyers to still import Iranian crude, at least temporarily.
Front-month Brent crude futures were at $72.40 per barrel at 0332 GMT on Monday, down 43 cents, or 0.6 percent from their last close.
US West Texas Intermediate (WTI) crude futures were down 46 cents, or 0.7 percent, at $62.68 a barrel.
Brent has lost more than 16 percent in value since early October, while WTI has declined by more than 18 percent since then, in part as hedge funds have cut their bullish wagers on crude to a one-year low by the end of October, data showed on Friday.
Prices came under pressure as it became clear that Washington was allowing several countries to continue importing crude from Iran despite the sanctions, which officially started on Monday.
The US said on Friday it will temporarily allow eight importers to keep buying Iranian oil.
Washington has so far not named the eight, referred to as “jurisdictions,” a term that might include Taiwan which the US 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.
Japan said on Monday it was in close communication with the US. While Chief Cabinet Secretary Yoshihide Suga declined to detail any potential sanction waivers, he said his government had asked Washington that sanctions should not have an adverse impact on Japanese companies.
Oil markets have been preparing for the sanctions for months.
“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.
“Sagging refining margins at a time of weak crude prices sends a very telling message to us that demand is underperforming,” he said.
A slowdown in demand would come just as output is rising.
Joint output from the world’s top producers — Russia, the US and Saudi Arabia — in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.
These three countries alone meet more than a third of consumption.
In the Middle East, Abu Dhabi National Oil Company 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.


Top seven Mideast-focused panels at Davos

Updated 23 min 54 sec ago
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Top seven Mideast-focused panels at Davos

Arab News DAVOS: Over 3,000 political, business and civil leaders are gathering in Davos, Switzerland, for the World Economic Forum Annual Meeting — including a sizeable delegation from Saudi Arabia and the wider Middle East.
Several panels focusing on the region will be held during the four-day event; here are seven that caught our eye.
Follow the latest news, views and analysis from Davos here: http://www.arabnews.com/davos19

Tuesday, 5:45 p.m. — Strategic Outlook on the Middle East
A look at how regional leaders can unlock the full potential of its next generation of entrepreneurs and workers. Speakers include Mohammed Al-Tuwaijri, Saudi Arabia’s minister of economy and planning.

Wednesday, 10 a.m. — An Insight, An Idea with Haifaa Al-Mansour
Saudi Arabia’s first female filmmaker and Crystal Award winner is due to speak about her dedication to breaking boundaries and shaping new stories.

Wednesday, 12 noon — The New Energy Equation
A panel on strategic shifts in energy cooperation and markets; speakers include Saudi Energy Minister Khalid Al-Falih.

Wednesday, 2:30 p.m. — The Future of Science and Technology in Society
Sarah Al-Amiri, UAE minister for advanced sciences, is one of the speakers on this panel about how science and technology is reshaping politics, business and public policy.

Thursday, 9:15 a.m. — Next Steps for Saudi Arabia
Al-Tuwaijri, Finance Minister Mohammed Al-Jadaan, and Tadawul Chairperson Sarah Al-Suhaimi are the Saudi speakers on this panel about the Kingdom’s reform plans.

Thursday, 1 p.m. — Asia’s Bet on the Middle East
This panel on the shifting relations between the two regions includes Iraqi Finance Minister Fuad Hussein as a speaker.

Thursday 1:30 p.m. — A Conversation with Omar Al-Razzaz, Prime Minister of Jordan
The Jordanian PM is set to speak to CNBC’s Hadley Gamble.