Oil prices were up slightly on Monday as the sanctions on Iranian crude exports formally began, however, the Trump administration granted eight countries temporary waivers to the sanctions which helped ease concerns about an oil supply shortage.  Anadarko photo.

Oil prices stop five-day fall Monday

After five days of significant drops, oil prices rose slightly on Monday as the United States formally imposed its sanctions on Iranian crude exports.

By 2:31 p.m., EST, benchmark Brent crude futures 67 cents to $73.50 and US West Texas Intermediate crude futures climbed 33 cents to $63.47/barrel.

The Trump administration announced on Monday that it will grant eight countries, India, China, Japan, South Korea, Turkey, Taiwan, Greece and Italy, temporary waivers to the sanctions which will allow them to continue to purchase Iranian crude without penalty.

Last May, US President Donald Trump withdrew the United States from the Iran nuclear agreement signed by former President US Barack Obama in 2015.  At that time, the Trump administration vowed to reduce Iranian crude exports to zero, but on Monday, Washington announced the exemptions for some of Iran’s biggest crude buyers.

The waivers limited gains in oil prices and Bob Yawger, director of futures at Mizuho told Reuters that recent weaknesses in equities markets have increased concerns about slipping global oil demand.

“We’re not getting the price rally that many participants thought they were going to get out of the Iran sanctions situation,” Yawger said.

After hitting four-year highs in October, oil prices receded 15 per cent and hedge funds have cut their bullish bets on crude to one-year lows.

US Secretary of State Mike Pompeo says over 20 countries have cut their crude imports from Tehran, resulting in a drop of over 1 million barrels per day of Iranian crude exports.  Brian Hook, US Special Representative for Iran told Reuters that US sanctions have cost Iran billions of dollars in oil revenue.

Iran is holding firm in its stance to continue to sell oil abroad. Analysis firm Kayrros reports that Iranian crude output was mostly unchanged in October from September and Iran continued to sell its oil on the global market.

Meanwhile, Reuters reports that China’s foreign ministry expressed regret at the US sanctions.

In October, combined output from Russia, the US and Saudi Arabia topped 33 million b/d, up by 10 million since 2010.  All three oil superpowers are producing crude at near or record volumes.