Oil prices gain as market tests $79 Brent

Ardebili and accused Russia Iran and the UAE of welcoming US sanctions on Iran for their own gain

Ardebili and accused Russia Iran and the UAE of welcoming US sanctions on Iran for their own gain

India's government will cut imports of oil from Iran by almost half for the months of September and October as Iran faces USA sanctions from the Trump administration set to be implemented in November.

"Saudi Arabia and the UAE are turning OPEC into a tool for the United States and consequently the organization has not much credit left", Iran's OPEC governor, Hossein Kazempour Ardebili, was quoted by media as saying.

Brent crude was up 17 cents at $78.35 a barrel at 1044 GMT.

India's Oil Ministry in June told refiners to prepare for a "drastic reduction or zero" imports from Iran from November.

The United States is under the process of imposing new economic sanctions after the Trump administration made a decision to pull out of the nuclear deal with Iran.

Washington is seeking to cut Iranian oil exports to zero by November as it reimposes sanctions, and is encouraging other producers such as Saudi Arabia, other OPEC members and Russian Federation to pump more to meet the shortfall.

Washington reimposed some of the financial sanctions from August 6, while those affecting Iran's petroleum sector will come into force from November 4.

Price rises were capped after U.S. Energy Secretary Rick Perry said Saudi Arabia, other members of OPEC and Russian Federation were to be admired for trying to prevent a spike in global oil prices. "But we have been more bullish than most in terms of how much we are going to lose from Iran and we believe we are going to lose 1.5-1.8 million barrels per day", Sen added.

Under the deal, Iran undertook to put limits on its nuclear program in exchange for the removal of nuclear-related sanctions. The sanctions would include targeting Iran's automotive sector, trade in gold, and other key metals.

India, Iran's No.2 oil client behind top buyer China, does not recognize the reimposed USA sanctions, but winning a waiver from the restrictions is a must for New Delhi to protect its wider exposure to the USA financial system.

In August, rising output in Libya, Iraq, Nigeria and Saudi Arabia offset declines in Iran, which is about to face new US sanctions that are already hurting Iranian exports, and in Venezuela.

Despite the supply-side risks posed by Venezuela and Iran, however, spare capacity in Saudi Arabia and Iraq, coupled with potential output recovery in Libya and Nigeria, could help balance the market.

The U.S., in news that was widely covered by media at the time, bypassed Saudi Arabia in February to become the second largest global oil producer, the EIA says.

US President Donald Trump has repeatedly urged OPEC to raise its production.

The EIA expects that USA crude oil production, most of it light sweet crude, will continue to exceed Russian and Saudi Arabian crude oil production for the remaining months of 2018 and through 2019.

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