On Friday, the prices of oil continued to decline on reports that the United States of America has agreed to allow eight countries to keep from purchasing oil from Iran after it reimposes its sanctions in the coming week.
According to a report that was released by Bloomberg, Washington has allowed eight countries, including Japan, India, and South Korea to have waivers on sanctions on Iran, that are scheduled to kick in this coming Monday,
The prices of Brent crude oil fell below $73 per barrel as the long-standing supply concerns were eased by the possible waivers.
Earlier last month, Brent crude was trading at $86 per barrel, the highest recorded amount within a period of four years.
The price of WTI Crude declined to $63 per barrel as a boost in oil production also contributed to the price decrease.
Opec, the oil cartel which includes oil producers such as Qatar, Iran, and Saudi Arabia said that production last month was able to reach 33.31m barrels a day – the highest recorded since 2016.
Russia, which is outside Opec, reported 11.41m barrels per day for its October production – which is considered a 30-year high.
Production had been raised across some of the nations in order to control the increasing prices ahead of the impending sanctions that will be imposed by the United States of America on Iran.
However, Washington is anticipated to announce the full list of countries that are allowed to continue purchasing oil from Iran on Monday.
Peter Kiernan, an energy analyst at the Economist Intelligence Unit, stated: “The reported awarding of waivers by the US for up to eight countries to continue buying Iranian oil, on the basis that they reduce volumes, shows that in the short term at least the Trump administration has set aside the goal of trying to cut Iran’s oil exports to zero.
Kiernan continued: “Although there are concerns of weakening oil demand in 2019 the underlying fear is that an abrupt shut off of Iranian supply would cause a spike in prices and leave oil consuming economies scrambling to buy oil elsewhere.