Oil prices fell today in the wake of expectations that Iran will continue to maintain some of its crude exports, even after the US sanctions targeting the country’s petroleum sector are set to come into force from next month.
International Brent crude declined $1.07 to stand at $83.09 per barrel after touching a four-year high of $86.74 last week, while US crude fell 93 cents to reach $73.41, Reuters reported.
The expectations stem from a statement issued by a US Government official last week that the administration is considering the possibility of granting waivers to some countries on the Iran sanctions.
Two Indian companies have ordered barrels for next month, according to India’s oil minister.
Petromatrix founder Olivier Jakob was quoted by the news agency as saying: “One way or another, it looks as though India is going to take some Iranian crude.” He added that the development was helping the oil industry to “retrace some of the price surge we saw last week.”
The US government asked its allies and businesses to reduce crude exports from Iran to zero from next month.
JBC Energy analysts told Reuters: “This is one of the single biggest supportive factors for crude. Having said that, it may well be that we are already in the most supportive phase coming from this change and the effect will soon begin to ease.”
Rising production from producers, including Saudi Arabia, also weighed on prices. Recently, the Middle Eastern nation reached a private deal with Russia to raise output to make up for lower Iranian supplies.
Last week, Saudi Arabia disclosed that it is planning to increase production next month from October level of 10.7 million barrels per day.
Other factors that pulled down prices include concerns of a potential impact on global economic growth due to the ongoing trade dispute between the US and China. Slow economic growth could hit oil demand.