US Sanctions on Iran Send Crude Oil Prices Soaring in India
Crude oil prices rose in India as concerns over disruptions to Middle East supply grew due to US sanctions on Iran. The US threatened its toughest-ever sanctions, sparking fears of prolonged restrictions on regional crude flows. In response, Iran warned that new US threats could trigger a devastating response.
The possibility of further sanctions increased uncertainty around Iranian exports, with Iranian crude offers to Chinese buyers declining sharply this week as the US blockade disrupted shipments. As a result, Iranian crude prices rose due to reduced supply.
Meanwhile, Saudi crude exports showed some recovery in physical supply after increasing to 3.993 million barrels per day in June from a record-low 3.434 million bpd in May. However, oil prices also remained supported by supply curtailments from major producers including Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait.
US crude inventories increased by 4.4 million barrels to 428.8 million barrels for the week ended August 14, while stocks at Cushing declined by 1.3 million barrels. Refinery crude runs increased by 216,000 bpd and refinery utilization rose by one percentage point.