India's Iran Oil Purchases to Fade Ahead of US Sanctions

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However, prices were able to rebound into the close on Friday after a report said Secretary of State Michael Pompeo was going to give a press conference on new sanctions on Iran.

The loss of Iranian oil to the market as refiners are cutting or halting purchase ahead of US sanctions in November is also raising concerns about supply.

The U.S. Energy Information Administration (EIA) said on Tuesday that the U.S. likely surpassed Saudi Arabia and Russian Federation earlier this year to become the world's top crude oil producer. China and India has also significantly cut oil imports from Iran.

If those estimates are right, it would mark the first time since 1973 that the USA has led the world in output, according to government figures.

For this month, India's oil import from China is bound to drop less than 12 million barrels each, this is against the backdrop of boosted purchase during the April-August period in the anticipation of reductions.

Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas U.S. August 22, 2018.

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Although the EIA does not publish crude production forecasts for Russia and Saudi Arabia in its short term outlook, it expects that US output will continue to exceed Russian and Saudi production for the remaining months of 2018 and through 2019.

Also, OPEC's crude supply hit a nine-month high of 32.63 million bpd, despite concerns over Venezuela and Iran, with higher volumes from Nigeria and Saudi Arabia as well as increased output in Libya and Iraq contributing to the impressive total.

Following crippling sanctions on Iran following the collapse of the Washington and Tehran's nuclear deal, the price of a barrel of U.S. crude oil could result in a price rise of $4 (£3.12) a gallon of unleaded fuel at petrol station pumps. OPEC is now supplying 32.7 million barrels a day, according to a Bloomberg survey, and that is with Iraq, Nigeria and Libya all producing near multi-year highs while their security situations deteriorate. Despite that fact, there are many risks that have caused the downfall in prices.

Iran's oil production fell for the fourth month in a row, according to OPEC data, to 3.584 million barrels, compared to 3.734 million barrels last July.

US crude oil production is expected to rise by 840,000 bpd to 11.5 million bpd next year, lower than a previous expectation to increase 1.02 million bpd to 11.7 million.

Elsewhere in his remarks, Kazempour Ardebili suggested that a deal reached between OPEC and non-OPEC producers in 2017 over production ceilings had already lost effect.

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