A day after the first round of USA sanctions against Iran went back into effect, oil prices remained largely indifferent, with Brent crude trading at US$73.52 a barrel, with West Texas Intermediate at US$67.83, both down slightly from a day earlier at the time of writing.
U.S. President Donald Trump tweeted that the sanctions were "the most biting sanctions ever imposed".
As plentiful volumes of USA crude might be looking for new homes when China imposes a 25% import tariff on American crude, a large number of the displaced barrels could make its way to India, analysts said.
United States sanctions on Iran's energy sector are set to be re-imposed after a 180-day "wind-down period" ending on November 4.
Vladimir Putin stated on Tuesday that he is deeply disappointed by the U.S. sanctions on Iran.
According to Bloomberg, Beijing has declined a request by USA envoys to stop importing crude oil from Iran.
European officials have said their governments are considering opening accounts for Iran at their national banks, which could receive oil payments. U.S. West Texas Intermediate crude futures rose 52 cents to settle at $69.01/Bbl, a 0.8% gain, Kallanish Energy reports.
This week we will continue to keep an eye on the trade dispute between the USA and China. However, Russia, the United States and the Saudi's are still producing 10 million to 11 million bpd of crude.
"The US seems hell-bent on regime change in Iran", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Observers have dismissed Trump's call for Saudi Arabia to abruptly increase oil production as political "noise".
Oil prices rose on Monday after Saudi crude production registered a surprising dip in July and as American shale drilling appeared to plateau. Crude inventories USOILC=ECI fell by 1.4 million barrels in the last week, the EIA data showed, compared with analysts' expectations for a decrease of 3.3 million barrels.
Less than a year after first oil from the U.S. was imported into India, state-owned Indian Oil Corp (IOC) has signed up to buy crude oil from the USA through a term-tender deal, a senior company official said.
In terms of production, the EIA on Tuesday slightly cut its 2018 expectation for average 2018 US crude output to 10.69 million bpd, down from its previous estimate of 10.79 million bpd. China is the only one that has flatly refused to reduce its intake of Iranian crude although it did say it will not expand its Iranian imports.
In America, customs will begin collecting duties on 279 product lines of Chinese goods as of 23 August, the US Trade Representative's Office said Tuesday. Some analysts warned that a global heat wave could also now affect oil demand.
This mostly impacts demand for power fuels such as thermal coal and natural gas. Prices could easily soar if tensions rise and violence spills over into the oil market.
This is unedited, unformatted feed from the Press Trust of India wire.