Published: Thu, September 27, 2018
Markets | By Erika Turner

Iran: US wish to halt Iran's crude exports won't come true

Why it matters: The increase in oil prices risks hurting the U.S. economy, a bright spot on Trump's record, just ahead of the crucial 2018 mid-term elections.

The US is looking to ease market tensions about global crude supplies, which largely lie at the US administration's feet to begin with.

The U.S. President spoke against the backdrop of rising oil price, which rose Monday to a four year-high at $81 per barrel and to $82 per barrel yesterday.

Iranian oil exports are declining ahead of a second round of US sanctions to be imposed on November 4 and Iran's economy is likely to contract 3 percent this year and 4 percent in 2019, the Institute of International Finance said on Tuesday.

U.S. crude inventories rose 1.9 million barrels in the week to September 21, according to U.S. Energy Information Administration (EIA) data.

In a speech before the United Nations, Mr Trump reiterated calls on the Organization of the Petroleum Exporting Countries to pump more oil and stop raising prices.

Washington will apply sanctions to halt oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), from November 4.

Iran blames Gulf rivals for deadly attack on military parade
Four gunmen opened fire on the crowd on Saturday, killing civilians and 12 members of the country's elite Revolutionary Guards . Hours after the attack, Iranian officials have increasingly said they suspect Ahvazi separatists for the attack.

United States officials, including President Donald Trump, are trying to assure consumers and investors that enough supply will remain in the oil market while requesting producers raise their output.

The IIF said Iranian shippers were also providing generous payment terms and, in some cases, accepting euros and Chinese yuan instead of US dollars. "It's good for peace and it's good for the shape of the worldwide price of oil".

Oil at $100? Not so fast, says Goldman Sachs.

Richard Robinson, manager of the Ashburton Global Energy Fund, said higher prices are nearly certainly on the cards.

"Undoubtedly the oil market is expected to be tight in coming months and, if OPEC's own numbers are to be believed, global oil inventories are to fall during the remainder of the year".

Analysts expect crude oil prices to stay under pressure on the back of a deadlock on supply between the top producers and the world's largest economy.

Zanganeh said such a plan isn't possible long-term, though Washington seems determined to cut Iran's crude exports, "even if for just a month".

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