India buying Iran oil in defiance of Trump sanctions

Secretary of State Mike Pompeo said on a visit to India in September that some waivers from the sanctions might be granted to countries buying Iranian oil, but only if they agreed to cut their imports to zero.

India, Iran's No. 2 oil client behind China, does not recognize the USA sanctions.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said there was also "chatter that Saudi Arabia has replaced all of Iran's lost oil".

"It seems that such remarks were made under USA pressure on Saudi authorities; otherwise in reality, neither Saudis nor any other countries could replace Iran's exports".

In a sign that Iran oil exports won't fall to nothing from November, India will buy 9 million barrels of Iranian crude next month, Reuters reported on Friday.

The report of a small crude decline eased fears that had pressured oil prices after US government data on Wednesday showed a large build in the USA commercial crude stockpile.

Prince Mohammed told Bloomberg on Friday that the kingdom had met its promise to Washington to make up for Iranian oil supplies lost through USA sanctions, reimposed when the United States exited a 2015 nuclear deal between Tehran and six powers.

LONDON-Oil prices started the week under pressure, amid reports the USA could grant waivers to some buyers of Iranian crude when oil sanctions on the Islamic Republic go into effect next month.

"This is one of the single biggest supportive factors for crude", said analysts at JBC Energy of the U.S.re-imposition of Iran sanctions.

Traders sent global benchmark Brent crude tumbling below $83 per barrel early in the session after China's central bank on Sunday slashed lenders' reserve requirements, a signal Beijing is working to maintain economic growth.

On Monday, Gulf of Mexico oil companies shut down 19 percent of oil production as Hurricane Michael moved toward eastern Gulf states including Florida.

The government last week effected a Rs 2.50 per litre cut in prices of petrol and diesel to ease inflationary pressure and boost consumer confidence. They said that was down 15,000 barrels from what Genscape reported earlier in the week.

In the run-up to 2019 general elections, Fitch Ratings recently raised the spectre of return of state control on fuel pricing in India.

Oil prices have extended a rally on expectations the sanctions will test the Organization of the Petroleum Exporting Countries and other producers.

Vanessa Coleman

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