The US has made it clear that they would not be advancing their oil stockpile which are kept for the emergencies. They are of the view that even if they allow to sell their oil reserves, it would not help much to satisfy the supply shortages which came because of Iran sanctions. As a result, the oil prices witnessed a strong momentum. The expectations were that the US President could help the global supply by releasing the oil reserves which could bring some relief to the global markets which are panicking on the shortages. These supply shortages are the result of the sanctions which were imposed on Iran by the US.
As a result of the US sanctions on Iran, the shipments from Iran have witnessed a substantial downtrend in the past few months. Since April 2018, the shipments have declined 35% which severely impacted the oil supply on a global basis. In recent times, there has been a lot happening in the world of the oil markets. The meeting which was conducted between OPEC entities as well as OPEC’s allies concluded with the decision that there is no need to boost the production. This decision also boosted the momentum in the oil prices and pushed the prices to a level which has not been seen in around four years. According to the US President, this push to the oil prices was completely uncalled for and he held OPEC responsible for the same. According to the US Energy Secretary, the supply shortages, which are the result of the sanctions imposed on Iran, could be met with the help of other producers. He also added that the US needs to concentrate on the required infrastructure which could help in the supply of the oil.
It seems that the US sanctions on Iran have indeed impacted the global markets and the oil prices. As a result of the sanctions, crude oil markets have tightened globally. The companies have, however, started avoiding the imports from Iran. SK Innovation, which is the biggest refiner in South Korea, has started to buy the US crude oil. The impact was even felt on India which has decided to cut the oil imports from Iran. In August, the United States made an announcement that it would be releasing oil barrels which would help it to garner the funds that could be deployed for the government programs. These barrels were supposed to be released from reserves in the month of October as well as November.
In last few days, oil prices have been surging while slight dip was noted as at September 27, 2018.
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