SHAFAQNA- Saudi Arabiaofficials have been claiming they are able to offset Iranian losses in Oil export under U.S. pressure. But, Iranian Oil Minister Bijan Zanganeh said that the market will never buy Saudi Arabia’s claim that it has been compensating for the loss of Iran’s oil exports.
Oil prices rose on growing evidence of falling crude exports from Iran, OPEC‘s third-largest producer, before the imposition of new U.S. sanctions and a partial shutdown in the Gulf of Mexico due to Hurricane Michael.
Cnbc claimed Iran’s crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of U.S. sanctions that take effect on Nov. 4. Iran exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Refinitiv Eikon data showed. An industry source who also tracks exports said October shipments were so far below 1 million bpd. That is down from at least 2.5 million bpd in April, before President Donald Trump in May withdrew the United States from a 2015 nuclear deal with Iran and reimposed sanctions. The data also marks a further fall from 1.6 million bpd in September.
“Such brags would only satisfy Mr. Trump but the market would never buy such a claim,” Iran’s oil ministry’s news service Shana quoted Zanganeh as saying in response to last week’s remarks by Saudi Crown Prince Mohammed bin Salman that the Saudis were offsetting Iranian losses and even more.
Crown Prince Mohammed in an interview with Bloomberg last week, said that “Actually the request that America made to Saudi Arabia and other OPEC countries is to be sure that if there is any loss of supply from Iran, that we will supply that. And that happened. Because recently, Iran reduced their exports by 700,000 barrels a day, if I’m not mistaken. And Saudi Arabia and OPEC and non-OPEC countries, they’ve produced 1.5 million barrels a day. So we export as much as 2 barrels for any barrel that disappeared from Iran recently. So we did our job and more,” MBS told Bloomberg.
In reaction to the Saudi claim, the oil minister of Iran—which continues to insist that its export can’t be completely halted said “It seems that such remarks were made under U.S. pressure on Saudi authorities; otherwise in reality, neither Saudis nor any other countries could replace Iran’s exports.”
Saudi claimed that it has increased crude output in October, near a record
Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries, said last week it has increased crude output in October to 10.7 million bpd, near a record.
Saudi Arabia is the only oil producer with significant spare capacity on hand to supply the market if needed. The kingdom has a maximum sustainable capacity of 12 million bpd,investing told.
US is pushing allies to cut imports of Iranian oil
Washington is pushing allies to cut imports of Iranian oil to zero and will impose a new round of sanctions on Iranian oil sales in November. But Iran, OPEC’s third-largest producer, has repeatedly said that its oil exports cannot be reduced to zero because of high demand levels in the market and has blamed Trump for an oil price rally caused by imposing sanctions on Tehran,reuters noticed.
Additional American sanctions targeting Iran’s oil supplies
Earlier this year, Donald Trump reinstated economic sanctions on Tehran after pulling the US out of the Joint Comprehensive Plan of Action, a landmark deal that the Islamic Republic struck with six major world powers in 2015. Washington later told countries they must stop buying Iranian oil from Nov. 4 or face financial consequences.
A first round of American sanctions took effect in August, targeting Iran’s access to the US dollar, metals trading, coal, industrial software, and auto sector. A second round, forthcoming on November 4, will be targeting Iran’s oil sales and its Central Bank, PressTV mentioned.
Washington’s sanctions are set to start on Nov. 4, and analysts say there may not be enough spare production capacity in the short-term to meet demand, potentially requiring large storage drawdowns.
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