Iran oil exports fell under US sanctions

Oil prices rose on Wednesday, supported by news of a fall in Iranian crude supplies as U.S. sanctions deter buyers, but gains were limited by evidence of a rise in U.S. inventories.

Iran’s crude oil and condensate exports in August are set to drop below 70 million barrels for the first time since April 2017, well ahead of the Nov. 4 start date for a second round of U.S. economic sanctions, preliminary trade flows data on Thomson Reuters Eikon show.

Officials at the state-run National Iranian Oil Co. provisionally expect crude shipments to drop to about 1.5 million barrels a day next month, down from about 2.3 million barrels a day in June, say people familiar with the country’s ports loading program.

Bowing to pressure from Washington, many crude buyers have already reduced orders from Iran, OPEC’s third-biggest producer. The Europe Union, China and other countries have vowed to resist the unilateral U.S. sanctions and are trying to find ways to keep buying crude from Iran. But they have struggled to find banks, shipping companies and insurers that are willing to risk running afoul of the U.S.

“U.S. sanctions toward Iran are now increasingly kicking in which will help to dry up the physical crude oil market,” said SEB Markets commodities analyst Bjarne Schieldrop.

Many experts had expected oil shipments to decline by about 1 million barrels by year’s end. Now some of them say that fall may have already happened. Iran hasn’t yet announced its exports this month or its forecast for next month.

The developments reflect in part a reluctance of tanker companies to ship Iranian oil.