Oil prices steady after Iranian exports fall further

India buying Iran oil in defiance of Trump sanctions

India buying Iran oil in defiance of Trump sanctions

Mr. Pradhan also said he had spoken to Saudi Arabia's Oil Minister two days ago regarding the higher oil prices and how prices should not be set with the interest of producing countries but also by keeping consuming countries' interests in mind.

Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, taking a major hit from United States sanctions and throwing a challenge to other OPEC oil producers as they seek to cover the shortfall.

International Olympic Committee and ONGC's refining subsidiary MRPL, (Mangalore Refinery and Petrochemicals Ltd) have placed an order for 1.25 million tonnes of Iranian crude.

US sanctions against Tehran are widely expected to have an immediate impact on Iran's oil exports, although the estimates of exactly how much of the country's oil could disappear from November 4 vary widely.

"The U.S. appears to be abandoning its tough stance on buyers of Iranian oil", analysts at Commerzbank said.

"Chatter that Saudi Arabia has replaced all of Iran's lost oil" is weighing on prices, said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

U.S. president Donald Trump in May withdrew from the 2015 nuclear accord with Iran, re-imposing economic sanctions against the Persian Gulf nation.

The International Monetary Fund (IMF) estimates that Iran's economy fell into a recession this year that will get worse next year as a result of renewed USA sanctions on Tehran.

Hedge funds cut their bullish wagers on US crude in the latest week to the lowest level in almost a year, data showed on Friday.

"It is still early to say how India will settle its trade with Iran", the first source said, adding that India could consider paying Iran for crude with the rupee currency.

Brent crude prices are now hovering around US$86 a barrel and global traders are betting that they will go past US$100.

With US sanctions on Iran looming, Moody's Investors Service had estimated a $500 million decline in earnings for Indian state-owned refiners, IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) on account of substituting crude oil imports from the Persian Gulf country. The figure also marks a further fall from 1.6 million bpd in September.

Besides, New Delhi sought to get around the restrictions by supplying goods including wheat, soybean meal and consumer products to Iran in exchange for oil.

The cost of the Indian basket of crude rose to $84.14 a barrel on 5 October, according to the Petroleum Planning and Analysis Cell.

On the last week's excise duty and fuel price cut, the minister said these prices will not be deregulated.

"The basic point is that they are all government companies", Mr. Pradhan said.

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