Oil rises 1 percent ahead of Iran sanctions

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His comments come just one day after the country's foreign minister said USA sanctions will have "severe consequences".

USA national security adviser John Bolton said on Wednesday the Trump administration wants sanctions on Iran's crude exports to strain Tehran, but does not want to harm countries that depend on the oil. The increase in OPEC production "has really started to tamp down concerns surrounding the loss of Iranian barrels".

Washington's sanctions targeting Iran's crude oil exports will come into force on November 4. "I am not in a position to make statements on this issue at this time", U.S. Ambassador to India Kenneth Juster told reporters recently. Although China and India's Iranian oil intake in recent months has fluctuated, and although some of their companies most exposed to the US financial system have drastically reduced or outright stopped imports from Iran (like India's Reliance Industries), the countries saw their imports in the first three weeks of October increase or hold steady around the volumes from recent months.

That will offset the decline in Iranian exports that could tighten supply. But, as a condition of waiver, Indian oil firms will reduce their imports to 14-15 million tonnes, the source said. While the outline of waivers for India and South Korea was agreed, no final decision has been made and an announcement is unlikely before the sanctions are reimposed, according to Asian officials with knowledge of the matter.

"Rising oil inventories and growing petro-nations output have calmed the supply fears related to the Iran oil embargo", said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd.in Zurich.

Besides, New Delhi sought to get around the restrictions by supplying goods, including wheat, soybean meal and consumer products, to Iran in exchange for oil.

"In theory, we could have been in a bullish market because of sanctions against Iran".

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"They're gutting President Trump's maximum pressure campaign", one senior congressional staffer briefed by administration officials on Iran and SWIFT said.

The United States is now in a race with Russian Federation as top producer.

The lack of clarity about US waivers from sanctions, who's getting such waivers (if at all), and how much reductions would be required for possibly winning a waiver, has been clouding the outlook for Iran's oil supply to the market, while the sanctions snap back in just four days.

With Saudi Arabia pumping out 10.65 million bpd so far in October, combined output from the top three oil producers is now higher than ever, at 33.41 million bpd, meaning that Russian Federation, the United States and Saudi Arabia alone meet more than a third of the world's nearly 100 million bpd of crude oil consumption.

On a weekly basis, U.S. crude production stood at 11.2 million bpd last week.

"Iranian crude is not a significant item in our crude basket".

The US appears to be satisfied with this reduction and is willing to give the waiver provided payments for oil purchases are parked in an escrow account which can be used for purchases from India, they said, adding the US does not want any money to reach Iran.