Brent crude drops below $83 on expectations Iran will maintain some exports

India buying Iran oil in defiance of Trump sanctions

India buying Iran oil in defiance of Trump sanctions

Uncertainty has been the buzzword in the oil market over the past couple of months.

Sources said this time around the entire 100 per cent of Iranian oil import bill can be paid in rupees.

Even Russia is helping Iran despite being virtually an energy rival. "Notwithstanding the present demand momentum, we have downgraded our 2019 USA growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation". However, according to Alice G. Wells, principal deputy assistant secretary of state for South and Central Asia, the U.S. has not taken any decision on sanctioning India for importing oil from Iran and investing in the Chabahar port.

But the United States continues to insist that it expects Iranian oil buyers to bring their purchases down to zero.

USA crude was down $1.14 at $73.20.

White House National Security Advisor John Bolton said only last week that the administration wanted to avoid all waivers and see Iranian oil and gas exports entirely staunched, but that it might not be able to achieve that aim.

Pierre Andurand, one of the most bullish oil investors, recorded the best monthly gain in his hedge fund in nearly four years and erased 2018 losses as crude prices surged in September. The number of longs declined by 1.5 percent, but more significant was the number of shorts soaring 24 percent in the week to October 2, the most since May.

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"Cooler heads are starting to prevail", Ashley Petersen, a senior oil market analyst at Stratas Advisors, told Bloomberg last week, commenting on the money managers' wagers on oil prices.

Higher prices will not be good for consumers, as Novak and all oil officials are aware.

Increasing tensions between the United States and Venezuela; the U.S. demanding an end to all imports of Iranian oil by early November; and the rupee's performance as Asia's worst performing currency of the year have compounded the situation and put India in a hard spot.

Moody's Investors Service in a report on Monday said the government's decision was credit negative for Indian state-owned oil marketing companies IOC, BPCL and HPCL. Oil dropped to around $83 a barrel on Monday. In September, Iran exported 1.6 million bpd.

Meanwhile President Trump's sanctions on Iran have given Saudi Arabia an opportunity to replace Iran something that has rilled their Oil Minister Bijan Zanganeh.

Persisting uncertainties on both the supply and demand side are making the market and participants jittery.

The International Monetary Fund (IMF) estimates that Iran's economy fell into a recession this year that will get worse next year as a result of renewed US sanctions on Tehran.

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