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Some OPEC members are U.S. 'tools,' Iran says

Some OPEC members are U.S. 'tools,' Iran says

The reapplication of USA sanctions - particularly if effective - likely marks the practical end of the supply cut agreement as OPEC operates through unanimous decision-making, and Saudi and Iranian oil market interests will grow increasingly divergent.

Crude rebounded from earlier losses after U.S. President Donald Trump withdrew from the Iranian nuclear accord and said new sanctions will be imposed on OPEC's third-biggest oil producer.

"Following the USA decision to withdraw from the nuclear agreement with Iran, Saudi Arabia is committed to supporting the stability of oil markets for the benefit of producers and consumers and the sustainability of the global economic growth", the official said.

While other Wall Street banks have bullish outlooks on crude, theirs aren't quite as strong as that of Bank of America. "Iranian is not the only crude".

Iranian Oil Minister Bijan Zangeneh said in an interview broadcast on Iranian television late Thursday that he believed Trump cut an agreement with certain OPEC members to keep production low in order to support the higher oil prices that stimulate USA shale production.

Or in my opinion, perhaps he showed Kim, it's a good deal for the USA or no deal, we'll see.

Oil prices slipped on Friday, but remained near 3-1/2 year highs on Friday as the prospect of new USA sanctions on Iran tightened the outlook for Middle East supply at a time when global crude production is only just keeping pace with rising demand.

"Whatever the decision of the United States, it's not going to disrupt our economy", he said Tuesday, according to the semi-official Mehr news agency.

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The bulk of Iran's crude exports, about 1.8 million bpd, go to Asia. Mnuchin said: "These sanctions do impact all of the major industries". US heating oil futures surged to $2.2258 a gallon, the highest since February 2015.

"Iran's exports of oil to Asia and Europe will nearly certainly decline later this year and into 2019 as some nations seek alternatives in order to avoid trouble with Washington and as sanctions start to bite", said Sukrit Vijayakar, director of energy consultancy Trifecta.

They also encouraged Iran to show "restraint" in response to the decision by the US.

The leaders said that according to the IAEA, Iran continued to abide by the restrictions set out by the JCPOA, in line with its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons.

The other key actor to watch is Saudi Arabia.

Saudi Arabia, on the other hand, could. "As before, it may take several rounds of reductions to reach target levels", energy consultancy FGE's Founder and Chairman Fereidun Fesharaki wrote in a note, adding that condensate, a super-light form of crude oil that was excluded in the last round of sanctions, may well be included, said Reuters.

Unlike 2012, the United States is entering these sanctions alone, and this means that it has less control over their efficacy. With higher supplies from alternative suppliers, crude prices are likely to normalise. Reportedly, Saudi Arabia, Kuwait, the United Arab Emirates, the United States and Russian Federation have the required oil capacities to raise exports in the short term, while Kuwait, Abu Dhabi and Saudi Arabia have the necessary spare capacity to respond effectively to Iranian export reductions.