Iran Upbeat About Oil Exports Despite Sanction Threat

Iran Oil Flare

Oil pops above $70 for first time since 2014

Oil prices clocked up more multi-year highs yesterday as traders adjusted to the prospects of renewed U.S. sanctions against major crude exporter Iran amid a tightening market.

Losses, however, were limited as the market contended with concerns about Venezuela's crude production slipping further and with bullish drawdowns in USA crude inventories.

After slumping before the announcement, crude oil prices jumped more than 3 percent on Wednesday, but have since been in a relative holding pattern.

The US West Texas Intermediate crude futures went down 7 cents at $71.29 per barrel, which is still an arm's reach from Thursday's November 2014 high of $71.89 per barrel.

With the United States pulling out from the landmark 2015 Iran nuclear deal, the subsequent sanctions that would be imposed by Washington DC on Tehran would affect the work at Chabahar Port undertaken by India and Iran, says a defence expert.

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Security forces were able to rescue around 50 employees stuck in the building during the attack, he added. But the Islamic State group has also stepped up attacks in recent months, particularly in Kabul.

Prices have gained over 8% over the past month and 15% since the beginning of the year. "Overall the market still looks poised for higher levels".

Gordon Johndroe, a Boeing vice president, said in a statement: "As we have throughout this process, we'll continue to follow the U.S. Government's lead". "We expect that around October Iranian exports will be down by 500,000 barrels per day and eventually fall by 1 million bpd in 1H19", said U.S. investment bank Jefferies in a note on Friday.

The price of Brent crude oil, considered the global benchmark for oil prices, surged 3.15 percent to close at $77.21 a barrel on the Intercontinental Exchange Futures Europe. Besides, there are a series of potential disasters facing Venezuela that could accelerate declines: a full-blown debt default, USA sanctions, and asset seizures from creditors.

European allies have said they remain committed to maintaining the nuclear deal, with German Chancellor Merkel reiterating her support of the accord Thursday.

Le Maire said Paris would seek to strengthen Europe's ability to block sanctions and provide investment finance to companies. They will grumble and accept it.

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Le Maire said the EU would hold "collective discussions with the United States to obtain. different rules" covering European companies that do business with Iran. "However, in medium term, with the economic slowdown in Turkey and China, it is conceivable that Iran's exports could decline to 1.2 -1.4 million barrels a day", Emadi told Trend May 10.

Crude traded little changed as Middle East conflicts are not seen escalating and output from other major producers is seen making up for any lost by Iran. The US Treasury said economic sanctions won't be imposed immediately, but will instead be subject to 90-day and 180-day wind-down periods.

"For the first time, Iran has the chance to show the world they are not the rogue nation they are always presented as, that they negotiated in good faith and keep to their commitments", said Karim Emile Bitar of the Institute for global and Strategic Studies in Paris.

Is $100 oil on its way back?

"The goal is to prevent Iran from ever developing or acquiring a nuclear weapon and the detail beyond that is something we are going to have to flesh out", the official added. "Observing the recent events in the value of Iranian rial, such a shortfall could result in the depreciation in the value of rial pushing the rial-to-dollar rate to 110,000 - within the first 12 months and again doubling the rate in the second year".

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