"In theory, we could have been in a bullish market because of sanctions against Iran".
The US has insisted all along that it wanted every country to reduce oil imports from Iran to zero eventually, but was open to country-specific waivers that would allow limited imports by those pledging "significant" cut.
Already, through its pressure campaign, the USA has managed to reduce Iran's oil exports from 2.7 million to 1.6 million barrels a month, according to internal US estimates.
"While the gain in US crude inventories was in line with the market expectation, it's still a sixth consecutive week of increase on the back of rising American production", Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo.
The US plans to re-impose oil-related sanctions on Iran on November 4 to choke the Islamic Republic's biggest source of income and pressure it to renegotiate a new nuclear deal.
Another country that has been seeking a sanctions waiver is Turkey. Sources further said that a series of briefings will be held in the next few days to provide details about the new concessions. They still have to decide on how to split the quantum and on the form of payments, the source said.
On the one hand, it's unclear how much Iranian oil will really be removed from the market, considering that Iran has already started to switch off transponders on board of some of its cargoes, although ship-tracking data on the tankers that can be tracked shows that Iranian oil exports are falling, but not as steeply as the market and analysts were expecting just a month or two ago.
Bloomberg reported that close United States allies South Korea and Japan had received waivers along with India, which relies heavily on supplies from Iran.
"In practical terms, this will mean that E.U. member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world", she told reporters. Indian public refineries like Mangalore has also been buying Iranian oil but not in the numbers that they were earlier.
Refineries using Iranian oil have also faced insurance issues during renewals in recent months. A state department spokesperson confirmed on Tuesday, "on November 5th 12:01, sanctions that were lifted under the Iran nuclear deal will come back into full effect".
India prefers Iranian oil as it comes cheap and suits many refineries' technical configuration.