Oil jumps, then pares gains as Trump pressures Opec again

And they're partly a self-inflicted injury: The administration's decision to pull out of the nuclear deal with Iran and reimpose sanctions on the country's oil exports starting in November has caused Iranian oil production to tumble, with follow-on effects on market prices. Brent hit US$82.55 per barrel, its highest since Nov 10, 2014.

A Bloomberg report argued today that if President Trump fails to convince OPEC to increase production to make up for the lost supply from Iran, he has another card up his sleeve: the U.S. Strategic Petroleum Reserve.

He said: "OPEC and OPEC nations are as usual, ripping off the rest of the world, and I don't like it, nobody should like it". "It's good for peace and it's good for the shape of the worldwide price of oil".

And then they take advantage of us by giving us high oil prices.

The website of Iran's oil ministry, Shana.ir, quotes the minister, Bijan Zanganeh, as saying the "U.S. dream of getting Iran's oil exports (effectively) to zero won't come true". The news was bearish for oil, but some analysts expressed skepticism about the efficiency of the mechanism on the grounds that the USA could simply expand the scope of the sanctions to include barter deals between the European Union and Iran.

The ship is one of at least seven tankers carrying Iranian oil that have gone rogue, The Financial Times has reported, in what appears to be a move by Tehran to sidestep upcoming sanctions by hiding the identity of its buyers and "reverting to an old playbook of selling [oil] in secret" as Iran did to evade past trading embargoes.

The so-called "OPEC+" group, which includes producers such as Saudi Arabia and Russian Federation, met over the weekend but did not see the need to add new output. The impending sanctions by the United States on Iran, the third-largest producer among OPEC, which will go into effect November 4, the rising domestic petrol and diesel prices, which touched new record highs in the backdrop of continued weakness in the rupee against the U.S. dollar, and the high crude oil prices that tend to widen the current account deficit for India, which meets more than 80 per cent of its oil requirement through imports, contribute to high oil prices. Expectation of a tightening supply in the global oil market in the coming months has pushed crude oil prices higher, say analysts.

"We are not going to put up with it, these frightful prices, much longer".

At the same time, the demand worldwide is reaching 100 million barrels per day for the first time in history.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.