Oil higher as US sanctions on Iran raise supply concerns

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However, potential supply cuts caused by US sanctions on Iran, the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC), are providing some support for oil prices.

Brent futures LCOc1 also rose but the gains were more muted, as the global benchmark ended 37 cents, or 0.5 percent, higher at $79.40 a barrel.

The countries are the world's two largest economies.

Oil futures rose more than 1 percent on Tuesday on signs that OPEC would not be prepared to raise output to address shrinking supplies from Iran, and as Saudi Arabia signaled an informal target near current levels.

According to data by the JODI database, which collects self-reported oil figures from 114 countries, Saudi Arabia's crude oil exports in July dropped by 126,000 bpd month on month, to 7.12 million bpd.


OPEC Secretary General Mohammad Barkindo said on Tuesday that OPEC and non-OPEC countries aim to agree a framework for long-term cooperation by December, when the oil producers plan to meet in Vienna.

The head of OPEC said Tuesday that Iran remains "a very important member" of the oil cartel, as Tehran braces for a new round of USA sanctions partially targeting its crude exports.

He did not specify how crude producers would compensate for declining exports from Iran, with new USA sanctions due to hit the Islamic republic´s oil industry on November 4.

Russian Federation says it's ready to talk with the USA on how to maintain global oil market balance.

Prices pared gains in post-settlement trade after data from industry group the American Petroleum Institute showed US crude inventories rose by 1.2 million barrels in the week to September 14 to 397.1 million, compared with analysts' expectations for a decrease of 2.7 million barrels.


A committee of OPEC members and other producers is to meet on September 23 in Algiers to review compliance with their output targets.

Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was now comfortable with prices above $80 per barrel, at least for the short term.

U.S. crude futures CLc1 were up $1.08 at $70.93 a barrel by 11:15 a.m. [1515 GMT], after the U.S. Energy Information Administration said crude and gasoline stockpiles fell last week.

On Tuesday, China said it had no choice but to retaliate against new US trade measures after US President Donald Trump imposed 10 per cent tariffs on about $200 billion worth of Chinese imports.


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