Oil prices edged higher on Monday, with international benchmark Brent rising above the $80 level on expectations of tighter markets upon the imposition of US sanctions on the crude sector in Iran on November.
Brent futures for December delivery gained 0.3 percent to $8In an effort to cut Iran’s oil exports to zero so as to push the country to renegotiate a deal on its nuclear program, US President Donald Trump’s administration will be reemploying sanctions against the Organization of the Petroleum Exporting Countries’ (OPEC) third-largest producer.
US Treasury Secretary Steven Mnuchin stated on Sunday that it would be more difficult for countries to get sanction waivers than it was during the previous Obama administration, when several countries, particularly in Asia, received them.
Countries would have to cut their purchases of Iranian oil by more than the approximately 20 percent level they did from 2013 to 2015 to get a hold of waivers, according to Mnuchin, adding that if they do give waivers, he expects the reductions will be significantly larger.
Mnuchin also said he does not expect they will reach zero next month but he does expect they will eventually achieve zero, noting that there have been already very significant declines in advance of this date.
Iran’s oil exports could drop by as much as two-thirds as a result of the sanctions, which are due to start on November 4, pressuring the markets. OPEC agreed in June to increase supply to make up for the expected disruption to Iranian exports.0.06 per barrel, while US West Texas Intermediate (WTI) oil futures climbed 0.4 percent to $69.47.