Recently, an attempt by Iran to contradict latest US’ sanctions on its critical oil trade ended up in failure. Tehran presented a million barrels of oil to confidential buyers on the IRENEX (Iran Energy Exchange), at a starting base price of $79.16 per barrel.
The offer involved limited bids of $16 underneath the base price, as the trading started. A final customer appeared after the price was reduced to $74.85 per barrel in the concluding hours and for only 280,000 of million barrels on offer. Iran declined to reveal the identity of the customer and stated only that a corporation of private organizations had purchased through almost three brokerages. The sales failure is a blow to Iran’s expectations of avoiding the renewed US oil sanctions, which starts on November 4, 2018. The sanctions follow President Donald Trump’s disengagement in May, as per the 2015 agreement to control Iran’s nuclear plan. The arrangement to sell oil on the energy exchange once in a week was proposed by Eshaq Jahangiri, Iran’s Vice President, in July for “defeating the U.S. efforts to block Iran’s oil exports.” Tehran expects by selling oil to private customers it will make harder for the U.S. to control and stop its sales.
Speaking of the oil market, recently, oil prices dropped down as investors were suspicious of trade slowdown. This was on the grounds of sentiment, as a quick drop in the financial market in the past week and dollar force earlier this week. That highlighted concerns such as growth might slow down, especially in Asia’s rising economies. The front-month Brent oil futures were commencing down by 46 Cents or 0.6%, at $77.16 per barrel. Also the U.S. WTI (West Texas Intermediate) crude futures were commencing down by 40 Cents or 0.6%, at $67.19 per barrel. Investors stayed cautious after heavy losses in the last week, whereas, a stronger dollar on safe-harbor buying establishes a force on the purchasing power of rising markets.