Oil cartel backs Iran in face of looming U.S. sanctions

Iran OPEC chief: 'Saudi and Russia are taking oil market hostage'

Iran OPEC chief: 'Saudi and Russia are taking oil market hostage'

However, potential supply cuts caused by U.S. sanctions on Iran, the third-largest producer among the members of oil cartel Opec, are providing some support for oil prices.

Brent crude futures were up 16 cents at $79.19 per barrel at 0658 GMT, after rising 1.3 percent in the previous session.

West Texas Intermediate crude for October delivery advanced 94 cents to settle at $69.85 a barrel on the New York Mercantile Exchange.

Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was now comfortable with prices above US$80 per barrel, at least for the short term.

"It will be no easy feat for Saudi Arabia and Russian Federation to balance declining production from Iran and Venezuela", said Abhishek Kumar, senior energy analyst at Interfax Energy in London, Reuters reported.

Crude inventories fell 2.1 million barrels last week to 394.1 million barrels, the lowest level since February 2015, EIA data showed.

The Chief of OPEC, Mohammad Barkindo said that Iran is a very important member of the oil exporting organisation, however, it has no choice but to continue working with all parties.

Crude oil started the week on a positive note as latest reports revealed that Iranian crude oil exports continued to decline amid the USA sanctions.

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US crude stockpiles rose by 1.2 million barrels to 397.1 million in the week to September 14, the American Petroleum Institute said.

He didn't address how the global oil industry immediately can replace Iranian crude supplies in an already-tight market.

Ahead of that meeting in Vienna, the producers will meet in Algeria this month to discuss possible scenarios. Iranian crude oil export loadings have declined by 580,000 barrels per day in the past three months, Bank of America Merrill Lynch analysts said in a note to clients.

USA stock indexes broadly fell yesterday, weighing on oil futures, on expectations that Trump would go ahead with the new tariffs and that Beijing would retaliate.

Bloomberg reported Tuesday, citing unnamed Saudi sources, the kingdom was now comfortable with prices above $80 per barrel, at least for the short-term.

China said it had no choice but to retaliate against new United States trade measures after Trump imposed 10 per cent tariffs on about $200 billion worth of Chinese imports.

Official inventory data from the U.S. Energy Information Administration will be released later on Wednesday.

USA sanctions affecting Iran's petroleum sector will come into force from November 4.

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