Crude oil prices rose on the New York and London markets Aug. 6 as the US government moved forward on the first of two highly anticipated US sanction rounds on Iran.
US President Donald Trump signed an executive order Aug. 5 restoring sanctions on Iran that prevent Iran’s government from buying US dollars. The order also bans purchases of Iran’s sovereign debt.
On Nov. 4, US officials will decide whether to issue a waiver to all or specific importers of Iranian oil for 6 months. Sara Vakhshouri of SVB Energy International in Washington, DC, told OGJ she believes Iran’s oil exports will show higher decline in September as buyers of Iranian oil try to avoid antagonizing US officials.
“The first round of sanctions…put severe limitation on transactions with Iran and insurance on oil tankers,” making it hard for Iran to sell its oil, Vakhshouri said.
She noted that importers of Iranian oil already are reducing oil purchases from Iran to prove to the US government that they markedly reduced their Iranian crude imports by Nov. 4.
Trump in May announced a US exit from an international agreement that lifted sanctions in exchange for Iran’s cooperation on its nuclear program.
Some analysts estimate Iran’s 2.5 million b/d of crude exports could fall by 1 million b/d if US sanctions are implemented as expected. Trump has said he is willing to talk with Iran, but Iran has resisted that notion.
Norbert Ruecker with Julius Baer commodity research told the Wall Street Journal that he believes, “a full embargo seems unlikely” on Iranian oil exports.
Energy prices
The light, sweet crude contract for September delivery on the New York Mercantile Exchange rose by 52¢ to close at $69.01/bbl on Aug. 6. The October contract gained 59¢ to settle at $67.94/bbl.
The NYMEX natural gas price for September gained less than 1¢ to a rounded $2.86/MMbtu. The Henry Hub cash gas price gained 4¢ to $2.86/MMbtu.
Ultralow-sulfur diesel for September increased 1¢ to a rounded $2.14/gal. The NYMEX reformulated gasoline blendstock for September edged down less than 1¢ to remain at a rounded $2.06/gal.
Brent crude oil for October increased 54¢ to $73.75/bbl on London’s International Commodity Exchange. The November contract gained 54¢ to settle at $74.07/bbl. The gas oil contract for August was $655.50/tonne, up $5.55.
The OPEC basket of crudes average price for Aug. 6 was $72.27/bbl, up 7¢.
Contact Paula Dittrick at [email protected].
