Oil pushes past $80 as Iran fears mount

Oil prices climb as Iran sanctions loom

Oil prices climb as Iran sanctions loom

"Going forward, economic uncertainty, and hence questions surrounding global oil demand, coupled with geopolitical tensions, will need to be factored into maintaining a balanced market in the months to come", the report said.

Oil prices rose on Tuesday amid looming United States sanctions against Iran's petroleum industry, despite efforts by Washington to get other major suppliers to make up for the expected disruption.

China has said that it would not stop buying Iranian oil, but Beijing is also said to have agreed not to increase its oil purchases from Iran.

Crude oil prices gained traction on Tuesday and finally staged a decisive recovery with the barrel of West Texas Intermediate breaking above the $69 mark.

Since spring, when the Trump Administration said it would impose sanctions on Iran, traders have been focusing on the impact they could have on global supply.

With Middle East crude markets also tightening because of the USA sanctions against Iran, many Asian refiners are seeking alternative supplies, with South Korean and Japanese imports of US crude hitting a record in September.

"South Korea bought 194,000 bpd from Iran in July", OilPrice said.


Brent crude, the global benchmark for oil, has been trading between $70 and $80 since April, only briefly rising above $80 in May and this week. "This is a huge uncertainty on the market - how countries, which buy nearly 2 million barrels per day of Iranian oil, will act".

The Wall Street Journal said OPEC's total oil production climbed last month, in a sign the oil cartel is sticking with a decision to begin pumping out more barrels of crude this summer after more than a year of holding back output.

In its monthly report, OPEC said world oil demand next year would rise by 1.41 million barrels per day (bpd), 20,000 bpd less than last month and the second consecutive reduction in the forecast.

Demand for crude from the Organization of the Petroleum Exporting Countries will moderate in 2019 to 31.9 million bpd, from an estimated 32.3 million bpd this year, the IEA said.

Although the shipment hiatus is unlikely to signal that China has been purposefully scaling back purchases to comply with USA pressure to have Iranian oil sales at zero, it could mean that Chinese refiners were looking for better terms for Iranian oil purchases, according to Bloomberg.

"Second-largest producer Iraq boosted its output 90,000 bpd to 4.65 million bpd".

WTI was pushed over $70 during the previous session due to falling crude inventory and production levels.

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