Oil prices have dipped following the US Government’s sanction waivers to a number of countries, allowing them to purchase crude oil from Iran.
Brent crude oil LCOc1 slipped 30 cents per barrel to reach $72.53, while US light crude CLc1 fell 30 cents to stand at $62.84 a barrel, Reuters reported.
Prior to the commencement of the US sanctions targeting Iran’s petroleum sector, the market had concerns over potential tightness due to a reduction in supplies from the country.
However, reports emerged last week stating Washington will grant waivers to eight countries to still import Iranian crude, at least temporarily, softening the sanctions.
Both benchmarks declined by more than 15% since reaching their highest levels in four years last month.
Energy consultancy firm Trisect director Surfeit Vijayakar was quoted by the news agency as saying: “The impact of the sanctions is going to be largely softened as a result of this allowance.”
Though the list of countries granted exemptions was not officially announced, it is likely to include India, South Korea and Japan, among others.
South Korea said that it secured a temporary waiver to import condensate from Iran, which is a major oil producer in the Middle East.
The latest round of sanctions comes after US President Donald Trump decided to pull out of the 2015 nuclear deal and includes 300 new designations, comprising Iran’s oil, shipping, insurance and banking sectors.
Despite the sanctions, Israel is maintaining a defiant stance, with Iranian President Hassan Rouhani stating that the country would not comply with the sanctions and continue to export oil.
In response to the sanctions on Iran, major oil producers have been raising recent production to offset supply cuts.
The combined output from Russia, the US and Saudi Arabia for last month stood at more than 33 million barrels per day.