Oil steady as concerns over Iran sanctions offset Chinese imports

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Oil prices started the week with gains due to the focus on supply disruptions and a potential impact of USA sanctions on Iranian crude oil output.

Brent crude futures rose 45 cents to $73.66 a barrel, a 0.6% gain.

Iran's exports of crude and condensate, a form of light oil extracted from gas fields, were down by 430,000 bpd, or 15%, in July compared with April, the last month before President Trump announced that he was pulling the US out of the Iran nuclear deal and re-imposing sanctions.

Muscat: The monthly report issued by the Ministry of Oil and Gas (MOG) indicated that the Sultanate's production of crude oil and condensate throughout July 2018 amounted to 30.24 million barrels, with a daily average of 975,500 barrels.

Oil prices held steady on Wednesday, supported by a report of rising USA crude inventories as well as the introduction of sanctions against Iran. On November 5th, the United States will resume sanctions against Iran's energy-related financial transactions.

Iran's fleet of very large crude carriers, or VLCCs, and Suezmax tankers - the largest that can fit fully-laden through the Suez Canal - has always played an important role in delivering Iranian crude to customers, but it is increasing as insurers and worldwide shipping companies react to the sanctions snap-back.

Despite a general unwillingness among Iranian crude oil buyers to start cutting their imports, many have done jut that anxious about repercussions from the US if they don't.

"It certainly is a reminder to everyone that the U.S.is serious about sanctions, and it's doubtful they will grant waivers", said John Kilduff, partner at Again Capital Management in NY. Thus, it is hard for India to stop doing business with Tehran. Will the US-China War now take now escalate even further as Beijing refuses to cease business with Tehran?

U.S. West Texas Intermediate (WTI) crude futures were up 19 cents, or 0.3 percent, at $68.68 barrel. "The reports that Saudi Arabia's production actually dropped in July continue to provide support for the market".

Indian crude imports from Iran continued in the range of 200,000-250,000 b/d during the previous sanctions on Iran.

EIA also reported on Wednesday that US oil production declined to 10.9 million barrels per day during the week ending July 27, dropping from its record high level of 11 million barrels per day.

Crude prices have been volatile in recent sessions as the market reacted to an increased supply from OPEC and Russian Federation while weighing the impact of a lack of Iranian barrels in the market due to U.S. sanctions, analysts said. It shipped out nearly 3 million barrels per day (bpd) of crude in September, equivalent to around 3 percent of global demand.

In America, customs will begin collecting duties on 279 product lines of Chinese goods as of 23 August, the US Trade Representative's Office said Tuesday. This represents around a third of global oil demand.