Oil prices rose on Tuesday as more evidence emerged that crude exports from Iran, OPEC’s third-largest producer, are declining in the run-up to the re-imposition of US sanctions and as a hurricane moved across the Gulf of Mexico.
Brent crude was up 45 cents, or 0.5%, at $84.36 a barrel, having fallen as low as $82.66 in the previous session before largely recovering. Brent hit a four-year high of $86.74 last week, CNBC reported.
US West Texas Intermediate crude futures rose 41 cents, or 0.5 %, to $74.70 a barrel.
Iran’s crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers are seeking alternatives ahead of the start of the US sanctions on Nov. 4 and creating a challenge to other OPEC oil producers as they seek to cover the shortfall.
The Islamic Republic exported 1.1 million barrels per day of crude in that seven-day period, Refinitiv Eikon data showed. An industry source who also tracks exports said October shipments were so far below 1 million bpd.
That is down from at least 2.5 million bpd in April, before President Donald Trump in May withdrew the United States from a 2015 nuclear deal with Iran and re-imposed sanctions. The figure also marks a further fall from 1.6 million bpd in September.
Last week, Saudi Arabia, the biggest producer among the Organization of the Petroleum Exporting Countries, announced plans to lift crude output next month to 10.7 million bpd, a record.
“Iranian barrels are declining fast, and Saudi Arabia’s promise to balance will face a reality check in a month’s time,” JP Morgan said in a note.
Iran’s Oil Minister Bijan Zanganeh on Monday called a Saudi claim that the kingdom could replace Iran’s crude exports “nonsense.”
“Iran’s oil cannot be replaced by Saudi Arabia nor any other country,” Zanganeh said, according to his ministry’s website.
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