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Oil dips as U.S. grants Iran sanctions waivers; Tehran defiant

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - prices slipped on Monday as the start of U.S. sanctions against Iran's fuel exports was softened by waivers allowing major buyers to still import Iranian crude, while Tehran said it would ignore and continue to sell.

Front-month Brent crude futures were at $72.66 per barrel at 0740 GMT on Monday, down 17 cents, or 0.2 percent from their last close.

U.S. Intermediate (WTI) crude futures were down 30 cents, or 0.5 percent, at $62.84 a barrel.

Both Brent and WTI have lost more than 15 percent in value since early October, in part as hedge funds have cut their bullish wagers on crude to a one-year low, data showed on Friday.

re-introduced sanctions against on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of Barack Obama, and adding 300 new designations including Iran's oil, shipping, insurance and sectors.

In response, Iranian said in speech broadcast on state TV on Monday that will break U.S. sanctions and continue to sell

has granted some exemptions. The said on Friday it will temporarily allow eight importers to keep buying Iranian

"The impact of the sanctions is going to be largely softened as a result of this allowance," said Sukrit Vijayakar, of Indian Trifecta.

Washington has so far not named the eight. China, India, South Korea, Turkey, Italy, the and have been the top importers of Iran's oil, while occasionally buys Iranian crude.

said on Monday it has been granted a waiver to at least temporarily continue to import condensate, a super-light form of crude oil, from and also still continue financial transactions with the country.

said it was in close communication with the While declined to detail any potential sanction waivers, he said his government had asked Washington that sanctions should not have an adverse impact on Japanese companies.

Chinese expressed regret at the U.S. decision, but would not directly say if had or had not been granted an exemption.

"and Iran carrying out normal cooperation under the framework of international law is lawful and reasonable, and should be respected and protected," she told a daily briefing in

have been preparing for the sanctions for months.

"Iranian exports and production had been declining steadily...Iranian exports show a decline of more than 1 million barrels per day (bpd) as of October from May," said of Emirates NBD


On the demand side, Bell warned that consumption may be slowing due to an economic slowdown, as seen in a sharp drop in refining profits.

"Sagging refining margins at a time of weak crude prices sends a very telling message to us that demand is underperforming," he said.

A slowdown in demand would come just as output is rising.

Joint output from the world's top producers - Russia, the and - in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.

In the Middle East, (ADNOC) plans to increase its to 4 million bpd by the end of 2020 and 5 million bpd by 2030, ADNOC said on Sunday, compared with current output of just over 3 million bpd.

(Reporting by Gloystein; editing by Richard Pullin)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, November 05 2018. 13:15 IST