China, Iran's single-largest oil customer, has said that it would not stop buying Iranian oil despite USA efforts to have the Iranian exports down to 'zero.' But Beijing was also said to have agreed to refrain from increasing its oil purchases from Iran.
Yesterday, data from API showed a sharp increase in inventories. USA crude dropped 30 cents to $66.13.
China is Saudi Arabia's largest trading partner with a $42 billion turnover past year.
The country served as a base for the US-led coalition during the 1991 Gulf War against Saddam.
Front-month crude oil futures each lost more than 4%. A sharp increase in inventories mean that the price of crude may continue to decline.
Iran exported 2.2 million barrels in the first two weeks of October, up 10 percent from last month, despite looming USA sanctions. "So we have to use oil reserves". One of its flagship products is called "Yi Lu Tong", meaning "Iran Connect", the bank said in its annual report.
U.S. sanctions targeting the country's oil sector take effect on 4 November and Trump administration officials have said they intend to reduce the country's exports to zero. The US received 3.22m bbl of Brent crude so far this year, the largest intake since at least 2013, according to Customs data compiled by Bloomberg. Around 10-12 per cent of these shipments are sourced from Iran. But India, Japan and South Korea are already scaling back on purchases of Iran crude oil, which suggests that the number will be bigger than previously thought.
The lender has almost 30,000 corporate clients, largely state-owned enterprises and oil firms, its annual report said.
However, the extent to which Saudi Arabia and other OPEC members offer enough volumes of crude oil and condensate to replace exports from Iran is unclear.
Oil fell towards $75 a barrel to its lowest since late August on Wednesday, pressured by concern that demand is weakening and supply ample even as US sanctions loom on oil exporter Iran. That trend has continued in the first six months of the current fiscal.
By Navneet DamaniCrude prices ended the week gone by on a positive note, but that was not enough to offset the drop of more than 4 per cent.
UBS analysts expect oil demand growth to slow to 1.2 million bpd in 2019, on higher oil prices and weaker economic growth, slightly above the long-term average, adding that demand is forecast to be flat in OECD countries, with China and India continuing to drive growth. There have been reports that companies in different parts of the world would defy sanctions and continue buying Iranian oil.
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