The Trump administration is actively considering waivers on sanctions it will reimpose next month for countries that are reducing their imports of Iranian oil, a U.S. government official said on Friday.
The comments followed news that India, Iran's No. 2 oil customer after China, will buy 9 million barrels of Iranian oil in November.
Ralph Leszczynski, Banchero Costa's head of research in Singapore, tells TradeWinds: " The US sanctions on Iranian oil imports are strictly unilateral, as they have been actively resisted by other buyers of Iranian oil.
She said the sanctions that would come into force on 4 November were created to bring Tehran to book and not to penalise India, which meets 83% of its crude oil requirements from outside.
"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.
India, Iran's No. 2 oil client behind China, does not recognize the USA sanctions. However, this time it is likely to skirt Washington's embargo on dollar payments by using rupees, while payments will probably be routed through Indian banks to avoid any United States financial intervention.
Washington said on Friday it was considering waivers for nations that were reducing imports of Iranian oil.
With US sanctions on Iran looming, Moody's Investors Service had estimated a $500 million decline in earnings for Indian state-owned refiners, IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) on account of substituting crude oil imports from the Persian Gulf country.
Opec accounts for around 40% of the global production.
Brent crude oil prices fell more than 1 percent on Monday after Washington said it may grant waivers to sanctions against Iran's oil exports next month, and as Saudi Arabia was said to be replacing any potential shortfall from Iran.
Saudi Arabia said last week it plans to raise production in November from October output of 10.7 million barrels per day (bpd), indicating Riyadh will be boosting its supply to the highest ever level. The Indian basket represents the average of Oman, Dubai and Brent crude.
On the last week's excise duty and fuel price cut, the minister said these prices will not be deregulated. They said that was down 15,000 barrels from what Genscape reported earlier in the week.
"Oil should not only be priced from a producers' point of view consumers interest should also be taken care of", he said.