Saudi energy minister Khalid al-Falih said at an investment conference in Riyadh on Tuesday that despite expected supply disruptions from USA sanctions against Iran that kick in from November 4, Saudi Arabia would step up to "meet any demand that materialises to ensure customers are satisfied".
In value terms, India imported $0.91 billion worth of crude oil from Iran in September alone, a 60 per cent jump over $0.57 billion worth of crude imported in the same month previous year. There have been reports that companies in different parts of the world would defy sanctions and continue buying Iranian oil.
In the months following the full implementation of sanctions in November, the total volumes of crude oil and condensate coming off the market will become more apparent. The US sanctions on Iran will come into effect in a few weeks' time.
Key players in the market are now issuing contradictory warnings, with the International Energy Agency fearing a looming shortage as OPEC frets about a resurgent glut. Elsewhere, gold has climbed to a three-month high.
Less than two weeks before U.S. sanctions against Iran kick in, OPEC said the oil market could shift toward a surplus and signaled it would adjust output accordingly if that were the case.
"While in the near-term prices are at risk from any further supply disruption, oil should trend lower heading into 2019 as slowing emerging market demand growth and the shale boom restore the oil market's supply cushion", said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer. The contract rose 39 cents to $66.82 on Wednesday. Washington is largely depending on Saudi Arabia to fill the gap left by the loss of the Iranian barrels.
This was higher than the 1.8 million that traders were expecting.
According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 6.3 million barrels during last week.
U.S. crude oil inventories increased in the week ending October 19, the U.S. Energy Information Administration (EIA) said in a report on Wednesday.
Output remained unchanged at 10.9 million barrels per day (bpd), slightly below a record 11.2 million bpd reached at the start of October.
The WTI crude oil continues to trade bullish despite an unexpected rise in crude oil inventories last week.
U.S. commercial crude oil stockpiles rose for a fifth consecutive week last week, increasing by 6.3 million barrels to 422.79 million barrels, the Energy Information Administration said on Wednesday.