Published: Wed, July 11, 2018
Economy | By

Will oil prices hit $120 a barrel?

Will oil prices hit $120 a barrel?

However, Opec and its allies are doing what they can to offset crude output shortfalls that have kept global supplies tight and prices high, but they don't want to overdo it, according to UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei. Now after the U.S. pulled out from the Iran Nuclear Deal, India has been in a dilemma over India-Iran trade especially that of oil.

Iran's Petroleum Minister Bijan Zanganeh says there has been no major change in the country's production and export of crude oil despite recent threats by US President Donald Trump to halt the oil trade activities of the Islamic Republic.

They argued that since Saudi Arabia had never pumped more than 10.6 million bpd, could it now increase production and make up for any missing Iranian volumes?

On Friday, Oil prices fell due to surging U.S. output and falling demand in China amid global tensions and a Saudi production increase.

"However, bringing all its spare capacity into play would incur a significant cost, while production would take time to bring fully online; increasing crude output from 11 million to 12 million barrels per day would likely take in the order of six to 12 months to fully ramp up", the analysts added.

Hossein Kazempour Ardebili, Iran's ambassador to the OPEC, said the strong rhetoric by Trump against OPEC and oil producers could soon push up crude prices to as high as 100 US dollars per barrel. He warned India against importing oil from the US, Saudi Arabia, Russia and others and said that if this happens then Iran will deprive India of all special privileges which have been extended to it.

Iran, OPEC's third-largest producer, is facing U.S. sanctions on its oil exports that are prompting some buyers to cut purchases.

Venezuela, which has enormous reserves but is also suffering under, among other problems, crippling United States sanctions, is shrinking out of the world oil market.

"There might be a slight decline in Iran's oil sale, but different companies' secret purchase of Iran's oil can compensate it", he said.

Now, President Trump is threatening sanctions against any country that continues to do business with Iran.

He added such policy is against the founding principles of OPEC. "South Korea overall is lifting zero oil (from Iran) for July loading".

"The embassy of the Republic of Korea denies any claims that it would not lift any Iranian crude and condensate in July", the South Korean embassy responded to the report.

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