United States Must Lift Aviation Sanctions On Iran

Iranian Supreme Leader Ali Khamenei waves to thousands of members of the Basij at Azadi stadium in Tehran on October 4. AP

Iranian Supreme Leader Ali Khamenei waves to thousands of members of the Basij at Azadi stadium in Tehran on October 4. AP

Oil traders say they are concerned that the kingdom isn't ramping up output quickly enough, and that it may not have enough capacity to fully cover Iran's losses.

She also said that the ICJ's decision on Iran-U.S. dispute is binding for Washington and must be obeyed.

The sources declined to be identified as they were not authorised to speak to the media. However, the country's refiners since June have cut purchases of Iranian crude ahead of USA sanctions.

Oil prices are up on the week overall despite a large build in crude oil prices.

Secretary of State Mike Pompeo announced on Wednesday the termination of the US and Iran's 1955 Treaty of Amity, Economic Relations, and Consular Rights following Iran's use of the document as justification to take the U.S.to the United Nations' International Court of Justice (ICJ) over sanctions imposed by the Trump administration. The oil price now stands at just over $84.

The UN's top tribunal unanimously ruled in its Wednesday verdict that the US must ensure that the re-instated sanctions are not impacting humanitarian aids or civil aviation safety.

On the one hand, Russia's oil sector stands to benefit economically by increasing its oil exports and thus increasing sales.

The kingdom has lifted production nearly to a record and might raise it again next month, although doing so will infringe on available spare capacity, limiting Saudi Arabia's ability to react to other supply shocks. This led some analysts to suggest that the details of the deal were intentionally leaked in order to keep the price of oil from continuing to climb ahead of the November 4 deadline.

Iran's exports will fall to 1.1 million b/d in October, Platts Analytics projects.

Iran's crude exports to China also increased by 29,000 bpd to 620,000 bpd, according to Kpler, as China cut its USA purchases amid an ongoing trade spat with the United States. As Iran's customers are cutting purchases and Venezuela's industry continues to struggle, trading giant Mercuria Energy Group Ltd. said last month Brent may spike over $100 in the fourth quarter and Trafigura Group expects it in early 2019.

"This has translated just between Russian Federation and Saudi Arabia, as of today, to about 1m barrels" of additional supply since the group chose to start rolling back its cuts in June, Al-Falih said. The friendship agreement came into effect in June 1957 and granted Iran economic and diplomatic privileges.

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