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The Trump administration reinstated sanctions on Iran’s energy, banking and shipping industries. Washington granted temporary waivers to eight countries, including China and India, the biggest purchasers of Iran’s oil.
The exemptions have been granted for 180 days, and will be reviewed toward the end of the period. China Waiver: 360,000 b/d. Purchases before sanctions: 658,000 b/d in Jan.-Sept. 2018
Saudi Arabia has enough spare capacity to cover for any shortfall related to Iran, although any further unexpected outages – from, say, Venezuela, Libya or Nigeria – would test the cartel’s abilities. Saudis indicated a price level of approx. $80 per barrel is comfortable, and would target this price level.
Venezuela’s crude production was in “free-fall” and could soon fall below 1 million barrels per day.
The EIA expects U.S. crude oil production will average 10.9 million barrels per day (b/d) in 2018, up from 9.4 million b/d in 2017 .
Previously: American Shale Oil: Real Long Term Growth or Does History Repeat Itself with Boom then Bust?