OPEC chief: Cartel must stay together as USA sanctions Iran

Iran OPEC chief: 'Saudi and Russia are taking oil market hostage'

Russia, the world's largest oil producer, and other producers in OPEC have kept in place a supply agreement to maintain prices while at the same time providing enough oil to the market.

Benchmark Brent crude is already nearing 80 USA dollars a barrel and some believe this figure may go even higher.

United States crude futures were down 6 cents at $69.79, after gaining 1.4 per cent the day before.

Iran's oil exports have fallen about 35 percent since Trump announced new USA sanctions on Tehran.

Iranian oil exports have plunged about 35 percent since April, the month before Trump ripped up the diplomatic deal that President Barack Obama negotiated to curtail Tehran's nuclear program and announced new oil sanctions.

An adviser to Iran's oil minister said on Tuesday that expected USA sanctions on Iran's energy sector could not reduce the country's oil sale to zero because of high demand levels in the market, state TV reported.

The change in Saudi Arabia's view on prices coincides with some intense oil diplomacy.

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The escalating trade row is raising concerns about the potential for slower growth in oil consumption, offsetting supply concerns stemming from upcoming USA sanctions on Iran over its nuclear programme. Barkindo said a "permanent" framework of cooperation between the 14 OPEC members and 11 non-OPEC oil states, including the world´s top producer Russian Federation, was expected in December. It warned that prices could rise above $80 unless producers compensate for lost supply from OPEC members Iran and Venezuela.

According to data by the JODI database, which collects self-reported oil figures from 114 countries, Saudi Arabia's crude oil exports in July dropped by 126,000 bpd month on month, to 7.12 million bpd.

The OPEC Chief did not specify how crude producers would compensate for declining exports from Iran, with new United States sanctions due to hit the Islamic republic's oil industry on November the 4th.

Official inventory data from the U.S. Energy Information Administration will be released on Wednesday.

Reuters previously reported Saudi Arabia wants crude to stay between $70 and $80/Bbl maximizing revenue and keeping a lid on prices until US congressional elections.

On Monday, Russia's Energy Minister Alexander Novak said that OPEC and non-OPEC members would discuss all possible supply scenarios when they meet this month in Algeria.

This expected increase follows higher forecast annual crude oil prices in 2018 and more than offsets slightly lower crude oil production from OPEC members in 2018.

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