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Iran refutes Saudi claim that can meet post-sanctions oil demand

10 October 2018

Wells, who was in New Delhi earlier this month as part of the delegation accompanying US Secretary of State Mike Pompeo for the India-US "2+2" dialogue, said there was no "blanket waiver or country-specific waiver" from US sanctions on trading with or investing in Iran or buying arms from Russian Federation.

India's move marks the second time in recent weeks New Delhi has disregarded the Trump administration's threat of sanctions.

Amid growing uncertainty of the repercussions of the Iranian sanction, Indian imports from Iran have shrunk, though the Indian government had indicated it would continue with the Iranian oil imports.

Brent crude, the global benchmark, was down 1.32% to $83.05 a barrel on London's Intercontinental Exchange early on Monday.

India will buy nine million barrels of Iranian oil in November, in a signal the world's third-biggest oil importer will continue purchasing crude from the Islamic republic despite usa sanctions coming into force on November 4.

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Oil dropped below $83 a barrel on Monday, pressured by expectations that some Iranian oil exports will keep flowing after the USA reimposes sanctions, easing a strain on supplies.

The International Monetary Fund (IMF) estimates that Iran's economy fell into a recession this year that will get worse next year as a result of renewed US sanctions on Tehran.

"Refiners have placed November nominations to lift 1.25 million tonnes (about 9 million barrels) of oil from Iran", one of the sources said.

The U.S.is imposing the sanctions because Iran has reneged on a 2015 nuclear deal-a point on which other major powers disagree-and because it wants Iranian forces to pull out of Syria and Iraq.

Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of USA sanctions that take effect on November 4. An industry source who also tracks exports said October shipments were so far below 1 million bpd. Also, subsidised domestic cooking gas prices have been increased by Rs 2.89 per 14.2 kg cylinder to Rs 502.40, an all-time high.

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Pradhan said he had urged Saudi Arabia's oil minister to keep in mind the interests of oil consuming countries when it came to higher prices.

Some Indian refiners recently made payments for Iranian oil in rupees, and could use the same mechanism in future to settle trade with Tehran if no other alternatives were found, state-run Indian Oil Company (IOC) Chairman Sanjiv Singh said.

"In effect, the government has asked the OMCs to sell petrol and diesel at subsidized prices, for which they will not be reimbursed", the report said.

In the run-up to 2019 general elections, Fitch Ratings recently raised the spectre of return of state control on fuel pricing in India.

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