Iran's Oil Minister: oil exports won't change much despite sanctions

Iran's Oil Minister: oil exports won't change much despite sanctions

President Donald Trump is preparing to impose new sanctions on Iran, the White House said on Wednesday, following the United States withdrawal from the multinational 2015 agreement that stalled Iran's nuclear programme.

"Such elevated oil geopolitical risks exacerbate the upside risks to Brent forecasts and reinforce our view that oil price volatility will continue to increase", the investment bank's analysts wrote.

The deal is set to expire at the end of 2018, but the Bank of America analysts said that OPEC and Russian Federation are likely to continue working together to prevent prices from falling.

What the new sanctions will be is not yet known, but previous sanctions on the Middle Eastern country saw a major drop off in oil exports that other OPEC members were only too happy to lap up.

The remarks from Middle East producers "did force investors to look a little bit more closer at the impact of USA sanctions on Iran and certainly there's some questions about the impact that we'll eventually see", Daniel Hynes, a senior commodities strategist at the Australia & New Zealand Banking Group Ltd., said by phone from Sydney.

Oil is priced and traded in USA dollars because of the dominance of the dollar-denominated Brent and West Texas Intermediate benchmarks.

Brent crude LCOc1 settled down 35 cents at $77.12 a barrel, just below the $78-level hit on Thursday, its highest since November 2014.

"OPEC, as always, stands ready to support oil market stability, together with non-OPEC oil producing nations participating in the Declaration of Cooperation", OPEC said, using its name for the pact on supply curbs. But its oil minister said on Thursday that Trump's decision to quit the pact would not affect Tehran's exports.

The rally was driven by looming USA sanctions against major oil producer and OPEC-member Iran which threaten to drive prices even higher over the near-term as traders prepare for an even tighter supply situation.

"President Trump has already stepped up pressure on OPEC to end supply cuts due to higher U.S. gasoline prices looming", Citi analysts said.

"With stocks falling quickly during the course of the next 18 months, we would expect continued upside pressure on crude oil prices and see Brent averaging $US75 a barrel in 2019 compared to $US70 a barrel this year", BoA analysts said.

Shortly after the exchange launched, Reuters reported on March 29 that Chinese regulators had informally asked a handful of financial institutions to prepare for pricing China's crude imports in the yuan, according to three sources at some of the financial firms. That's about 1 million barrels a day more than in early 2016.

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