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Oil steady as U.S. sanctions on Iran begin, Tehran defiant

Reuters  |  LONDON 

By Christopher Johnson

LONDON (Reuters) - prices steadied on Monday as U.S. sanctions against Iran's fuel exports began but were softened by waivers allowing major buyers to import Iranian crude for a while, as Tehran said it would defy and continue to sell.

Brent was unchanged at $72.83 a barrel by 1230 GMT. U.S. light crude was 15 cents lower at $62.99.

Both benchmarks have lost more than 15 percent since hitting four-year highs in early October, as hedge funds have cut bullish bets on crude to a one-year low.

"Oil bulls have long pinned their hopes on the factor and today's dearth of upside potential will be a major source of concern," said Stephen Brennock, at brokerage

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

In response, Iranian said in a speech broadcast on state TV that would break the sanctions and continue to sell oil.

And said on Friday it will temporarily allow eight importers to keep buying Iranian oil.

"U.S. sanctions against Iran ... created serious concerns with traders earlier in September. But they are turning into a damp squib," said Fiona Cincotta, at City Index.

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

said on Monday it had been granted a waiver, at least temporarily, to import condensate, a super-light form of crude oil, from Iran. It was also allowed to continue financial transactions with the country, it said.

China's foreign ministry expressed regret at the U.S. decision but would not directly say if had or had not been granted an exemption.

have been anticipating the sanctions for months and the world's biggest producers have been increasing output.

Joint output from Russia, the and rose above 33 million barrels per day (bpd) for the first time in October, up 10 million bpd since 2010, with all three pumping at or near record volumes.

In the Middle East, the plans to increase its to 4 million bpd by the end of 2020 and to 5 million bpd by 2030, it said on Sunday, from output of just over 3 million bpd.

(Reporting by in London and Henning Gloystein in Singapore; editing by and Louise Heavens)

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

First Published: Mon, November 05 2018. 18:11 IST