Crude Oil Price Surges on Iran Sanctions, Gulf of Mexico Fears

Oil dips but bounces off low on hopes for demand boost from China stimulus

Crude Oil Price Surges on Iran Sanctions, Gulf of Mexico Fears

However, a US government official said on Friday that the country could consider exemptions for nations that have already shown efforts to reduce their imports of Iranian oil. Ahead of the gathering, U.S. President Donald Trump asked OPEC to boost production to compensate for the loss of Iranian oil exports, which are under American sanctions.

The announcement, the first indication Washington was considering such waivers, followed a Reuters report that India planned to lift some Iranian oil in November although it has been cutting back on Iranian imports recent months.

"We expect the global leadership to acknowledge India's need for Iran's oil", Pradhan said, adding that he wanted major oil producers like Saudi Arabia to raise production.

Top US officials are said to remain divided over whether they should save Iran's access to global financial markets ahead of November U-S sanctions.

Indian Oil Corp (IOC) Chairman Sanjiv Singh said his company is among the two which have placed order for November. But New Delhi needs a waiver to ensure its wider exposure to the USA financial system is not affected. Paying in rupee is an option. This option was used to pay for Iranian oil during the sanctions imposed by the United States during Barack Obama's presidency and other European governments.

White House National Security Advisor John Bolton said only last week that the administration wanted to avoid all waivers and see Iranian oil and gas exports entirely staunched, but that it might not be able to achieve that aim. "Iran's oil can not be replaced by Saudi Arabia".

"However it would come at a cost, both in terms of higher oil prices compared to the favourable terms it gets from Iran and in terms of higher shipping costs as they would inevitably be longer distance shipments compared to Iranian exports".

The sanctions are being reimposed as a result of Trump's decision to withdraw the United States from Iran's 2015 nuclear deal with world powers, which had lifted sanctions in exchange for curbs on Tehran's nuclear activities.

The market will continue to react to "supply-driven risks", according to Darling, who also pointed to two of the key uncertainties on the supply side-the world's actual spare capacity and Saudi Arabia's actual ability to "really turn up the taps" this winter.

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 USA sanctions and throwing a challenge to other OPEC oil producers as they seek to cover the shortfall.

India had diversified its oil supplies to cushion the impact of sanctions, he said.

Iran is India's third-largest oil supplier behind Iraq and Saudi Arabia.

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