Iran's oil exports dropped by 7 percent to 2.32 million bpd in July-their lowest level in four months-as South Korea and Europe are slashing imports ahead of the return of the US sanctions on Tehran, data from S&P Global Platts showed on Tuesday. The move came in response to the Trump administration's plan to slap the same tariff on an equal amount of Chinese imports in the coming weeks. However, the United States has asked all nations to stop their oil imports from Iran by November 2018 as Trump vouches to bring Iran's oil sales to zero.
"Of course, such decisions being taken by the USA side are absolutely unfriendly and can hardly be associated with the. constructive atmosphere achieved at the latest meeting of the two presidents", he was quoted by Russian news agency Tass as saying.
State-run refiner Indian Oil Corp., which had been buying US crude in the spot market, signed a term tender to purchase American oil for delivery every month between November and January, according to Finance Director Arun Kumar Sharma.
Front-month Brent crude oil futures LCOc1 were at $74.50 per barrel at 0651 GMT, down 15 cents, or 0.2 percent, from their last close. Earlier today, crude oil sold off after it was announced that Saudi Arabia has resumed oil shipments through the Red Sea shipping line of Bab al-Mandeb over the weekend.
"The U.S. -China trade war is set to worsen, and its impact on oil prices will be gradual as the situation develops", said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
This time around, some of Iran's former creative methods in trade with Asian customers, including a barter system which avoids sanctionable transfers to the nation, may also work with the Europeans.
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Official US fuel storage data is due to be released later on Wednesday by the Energy Information Administration (EIA).
Syncrude Canada's nameplate capacity stands for roughly 10 percent of the Canadian crude oil supply.
For the past week, crude imports averaged 7.9 million barrels a day, up by 182,000 compared with the previous week.
Net U.S. crude imports fell last week by 358,000 barrels per day.
"The price action does not do the contract any favor as it shows how speculative day-traders remain firmly in control and with that we can see temporary dislocations to the worldwide market", said Ole Sloth Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The White House said in a statement Monday that the United States will reactivate a slew of sanctions on Iran's financial and industrial sectors beginning on Tuesday. Gasoline inventories increased by 3.1 million barrels and distillate stockpiles rose by about 1.8 million barrels. The impact on the Iranian economy is expected to be harsh and the restrictions on oil and gas exports are expected to be harsher still.