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Oil Rates Hit Four-Year High As US Sanctions Hit Iran Production

Oil Rates Hit Four-Year High As US Sanctions Hit Iran Production

Wednesday, 12 September, 2018 - 13:00
A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005 | Reuters
London- Asharq Al-Awsat
As the second wave of US sanctions against Iran closes in, oil rates shot up on global markets touching a four-year high on Tuesday, with markets bracing for regulations restricting importing Iranian crude.

Brent crude rose $78 a barrel on Tuesday, the highest in four years, gaining more than 10 percent since mid-August.

On another note, US Energy Secretary Rick Perry met with his Saudi counterpart Khaled al-Falih in Washington, with the Trump administration urging giant oil producers to keep production high. Perry will meet with Russian Energy Minister Alexander Novak Thursday in Moscow.

Perry and Falih discussed the state of world oil markets, the potential for US-Saudi civil nuclear cooperation, and efforts to share technologies to develop “clean fossil fuels,” US Department of Energy said in a statement.

The move coincides with a statement by Novak saying that the Organization of the Petroleum Exporting Countries (OPEC) and independent producers, known as the OPEC + alliance, may sign a new long-term cooperation agreement next December.

OPEC and non-OPEC officials meet later this month to discuss proposals for an increase in oil production.

OPEC member states, Russia and other non-OPEC producers agreed in June to re-impose 100 percent compliance with the oil production cuts agreement struck in January 2017.

On the other hand, Novak said that Russian companies are able to increase oil production and that Russian crude oil production stood at 11.21 million bpd in August, unchanged from July.

Russia is a partner in the cooperation production cut agreement to stabilize world oil prices between OPEC and non-OPEC producers.

Another source told Reuters that India's state-run Bharat Petroleum will skip buying Iranian oil in October-- US crude oil exports to Japan and South Korea are expected to rise to record highs.

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