Oil Prices Go Up as Sanctions Curb Iranian Exports

Front-month volumes in the crude futures have risen to trade nearly 2.8 million lots of 1,000 barrels in July.

He added: "These Iranian barrels that we're going to lose, it's really going to hurt".

Japan's efforts to get a waiver from Washington that would allow it to continue importing oil from Iran appear to have been unsuccessful, according to Jiji Press, who adds that Japanese oil companies are now forced to prepare to suspend Iranian imports and investigate ways in which they can switch to other Middle East producers.

The U.S. wants to reduce Iran's oil exports effectively to zero with renewed sanctions in November after pulling out of the nuclear deal between Iran and western powers in May.

WTI is now trading at $70.6 per barrel, and Brent is trading at $8.2 per barrel premium to WTI.

Innes and Brennock are not the only ones to feel this way. He also stated that the Iranian production is already giving indications of declining. India and China's combined purchases of Iranian crude will decline to nearly 1 million barrels a day from about 1.3 million because of the sanctions, according to ESAI Energy. This was the highest production has gone to for this year. Even though Libya's recovery boosts OPEC's combined oil output, the country remains an unreliable supplier as civil strife continues to disrupt its petroleum industry.

In other news, Iraq is planning to increase its exports as it aims to take advantage of Iran's falling production. It is due to this high count of oil rigs that the United States has been able to maintain such high production rates.

The ongoing trade wars between the U.S. and some of the world's biggest economies, including the European Union and China, could hurt the demand for oil if they aren't settled soon.

The sanctions were originally halted in 2015, when China, Russia, Britain, France, Germany, the European Union, Russia, the UK, Iran and the USA signed the Joint Comprehensive Plan of Action - also known as Iran nuclear deal.

China's manufacturing activity grew at the slowest pace in more than a year in August, with export orders shrinking for a fifth month and employers cutting more staff, a private survey showed Monday.

Emerging markets are a key driver of global oil demand growth, but several of them - especially Turkey and Argentina but also Indonesia and South Africa - have seen their currencies and stock markets come under pressure in recent months amid inflation, a strong US-dollar and escalating global trade disputes.


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