Oil prices fell on Friday, heading for a weekly loss of more than 6%, following reports that Washington has granted several countries sanctions waivers allowing them to continue to import Iranian crude.
Meanwhile, US crude oil production surged by 416,000 bpd to a record 11.346 million bpd in August, the US Energy Information Administration (EIA) said in a monthly report this week.
The rial currency has also sunk against the US dollar due to the sanctions threat, with a heavy demand for dollars among ordinary Iranians trying to protect their savings.
Goldman Sachs said it expects Iran's crude oil exports to fall to 1.15 million barrels per day (bpd) by the end of the year, down from around 2.5 million bpd in mid-2018.
According to an Economic Times report, the USA has broadly agreed to grant India a waiver from Iran sanctions, which would allow Indian oil companies to continue to import about 1.25 million tonnes of oil a month till March from Tehran. Last year, average Chinese imports of Iranian oil were 602,500 bpd, Platts has estimated.
No details have been released on the waiver agreement reportedly made by South Korea, Iran's third-largest oil customer before Trump announced its JCPOA pullout in May. The National Iranian Oil Company (NIOC) has reportedly leased some storage capacity at Dalian. Saudi Arabia could make up the difference; while the kingdom has threatened to use oil in retaliation for global punishment over its killing of journalist Jamal Khashoggi, it also is eager to squeeze Iran, its regional rival.
Leicester leave it late against 10-man West Ham
Jamie Vardy has been backed to rediscover his scoring touch by Leicester boss Claude Puel . We started very well, but after, I don't know why, we lost control.
Despite these efforts, Allen said any potential Iran oil sanction waivers would likely only be temporary.
"Our goal remains to get to zero oil purchases from Iran as quickly as possible".
One unresolved issue is whether the United States will press to disconnect Iranian banks from SWIFT, the worldwide system of interbank transfers headed in Belgium.
"The United States is in the midst of an internal process to consider significant reduction exceptions for individual countries, but that is only on a case-by-case basis", State Department's Deputy Spokesperson Robert Paladino told reporters.
The lack of clarity about USA waivers from sanctions, who's getting such waivers (if at all), and how much reductions would be required for possibly winning a waiver, has been clouding the outlook for Iran's oil supply to the market, while the sanctions snap back in just four days.
Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of substitute crudes - Saudi Arabia, Kuwait, Iraq, Nigeria, and the US.