Japanese Oil Wholesalers ‘Prepare To Suspend’ Iranian Imports

Donald Trump and Hassan Rouhani

Renewed concerns of a heightened trade war between Washington and Beijing are bringing more pressure on global oil markets than the impending removal of more than 1 million barrels per day (bpd) of Iranian oil due to fresh US sanctions, ushering in two market movers that traders did not have to wrestle with just a few months ago.

Brent crude futures were lower on Tuesday afternoon in Asia, trading down 0.10 percent to $78.07 per barrel.

The price of Brent went up by about 60 cents to sell at $78.24 a barrel, while US crude went up by 15 cents to trade at $69.95.

Wholesaler JXTG also declined to confirm the report.

Investors anticipate less supply from Iran as US sanctions on Tehran begin to bite.

Iran's oil exports are tumbling again as the country's key buyers in Asia take fewer cargoes in the weeks before US sanctions take full effect.

Production by the Organization of the Petroleum Exporting Countries rose 220,000 barrels per day (bpd) in August to a 2018 high of 32.79 million bpd, a Reuters survey showed.

Amid mounting discontentment toward President Hassan Rohani's government over a deterioration in the country's economic situation, Iranian lawmakers last week sacked the minister of economic affairs and finance, the latest in a continuing shake-up of top economic personnel in the country.

However, according to energy expert John Kilduff, the Iranian sanctions could actually push up the price of crude oil on the West Texas Intermediate by as much as 30% by this winter.

According to the Associated Press, the Iranian rial ended its weekly trading figures against the dollar at a stunning rate of 150,000 rials to just $1; the lowest level on record. Given the current upside momentum, this price level could easily be achieved later today especially if additional U.S. Gulf oil operations are shutdown once the hurricane's path and strength are determined.

But although Iranian oil makes up a relatively small part of the total, industry experts say consumers in Japan may have to pay more for petrol and other petroleum-related products. Investors anticipate less supply from Iran as United States sanctions on Tehran begin to bite.

"The oil market is expected to trade within the current range". Crude is up 9% since mid-August as WTI flirts with $70 per barrel.

The bank also said it expects Brent to average at $75 per barrel, a huge jump from its prior prediction of $55 per barrel.

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