President Donald Trump said the United States “will take care” of countries that continue to buy Iranian oil after the second round of U.S. sanctions kick in on November 4 this year. Trump made the comment speaking to reporters in Washington, days after India said it will buy 9 million barrels of crude from Iran and Reuters reported a VLCC carrying Iranian crude had offloaded it in bonded storage at the Chinese port of Dalian.
The Economic Times reports that Indian Petroleum Minister Dharmendra Pradhan had told media that India had its own energy needs to satisfy, which reaffirms the message sent by New Delhi to Washington earlier this year: although the two may be allies, they sometimes have different priorities. India is facing popular unrest because of rising inflation, and one of its causes is more expensive oil.
The country is Iran’s second-biggest crude oil buyer, with Iranian crude accounting for almost a tenth of India’s total oil imports in financial 2017/2018.
China, for its part, has made it clear on numerous occasions it has no intention of cutting Iranian imports of crude oil. Despite media reports that it has been taking less Iranian crude, it seems this was a temporary situation as the trade row between Beijing and Washington deepens.
Meanwhile, Saudi Arabia has been assuring the market that it can replace all lost Iranian supply by boosting production to a record-high 10.7 million bpd—not even a million bpd more than what The Kingdom pumped prior to the OPEC+ agreement in November 2016. To compare, Iran’s exports as of April, the month before Trump pulled the United States out of the nuclear deal, were more than 2.5 million bpd.
Traders remain tangled in uncertainty about the actual loss of Iranian supply as Iranian tankers conceal their routes by turning off the transponders used to track vessel movement.
By Irina Slav for Oilprice.com
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