Saudi Oil Chief: OPEC's in 'Produce as Much as You Can' Mode

Why India needs to rethink its relationship with OPEC

Why India needs to rethink its relationship with OPEC

The decisions by the state oil majors came after two visits each around June and September by officials from the US State Department including Francis Fannon, Assistant Secretary for the Bureau of Energy Resources, said the same senior person. "Two of our oil companies have made nominations to purchase Iranian oil in November".

Mr Falih added that Saudi Arabia will raise oil output to 11 million barrels per day from 10.7 million.

US Treasury Secretary Steven Mnuchin on Sunday dismissed concerns that oil prices could rise, saying the market had already factored in the loss of Iranian oil.

Indian Oil Corporation (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) have reportedly placed order for 1.25 MT of crude oil from Iran. According a Reuters source, us officials visited Sinopec in Beijing in August and demanded steep reductions of oil imports from Iran. The US has not imported crude oil and condensate from Iran in several decades. There were some concerns the kingdom could use oil as a "weapon" if sanctions were imposed on it by the U.S. and its allies as a result of the killing of the journalist Jamal Khashoggi.




In an indication of increasing appetite for USA crude, India's oil imports from the United States during the first six months of 2018-19 rose ten times to 3.03 MT as compared to 0.28 MT of crude imported in the corresponding period last fiscal.

The minister indicated that the agreement starts in January 2019 and will allow oil countries to intervene to re-balance the market in any appropriate time from January onward.

Iran sanctions are around the corner (in November), but for now the crude oil market seems to be focused on lower global stocks (lower growth?) and the Saudi murder of Jamal Khashoggi. U.S. President Donald Trump is counting on Saudi cooperation to soften potential price increases from the sanctions that take effect next month. "That policy has been consistent for many years", Falih said. The bank expects Brent to trade at $85 to $90 a barrel in the next three to six months. Add to that higher Russian production, a return of Libyan output, and the market is finding healthy supply just at a time when demand is waning. Last week, data from the EIA showed that inventories were at 6.5 million barrels. Oil prices have jumped over 40 per cent since January a year ago thanks to the global oil cuts and more recently concern about dwindling production from major oil producers, including Iran.

"Brent and WTI got caught up in the risk-off markets and the API release later in the day didn't offer any chance of reprieve as it reported a huge build of 9.88m barrels, against expectations of a much smaller increase".

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