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Saudi Arabia has 'no intention' of 1973 oil embargo replay

Saudi Arabia has 'no intention' of 1973 oil embargo replay

Oil prices plunged about 5 per cent on Tuesday to two-month lows as a sell-off in global equity markets raised worries about demand growth and after Saudi Arabia said it could supply more crude quickly if needed, easing concerns ahead of U.S. sanctions on Iran.

Khalid al-Falih said if the kingdom has to use its oil reserves if it wants to cover 3 million barrels per day of oil loss from Iran.

The United States warned Russian Federation on Sunday about assisting any potential Iranian attempts to evade an upcoming round of U.S. sanctions against the Islamic Republic, scheduled to take effect on November 4, months after U.S. President Donald Trump withdrew America from the 2015 nuclear deal.

India can probably do without importing Iranian crude oil, the chairman of a Switzerland-based think tank told Times of India on Tuesday, but warned that the trade wars and tariffs are more worrisome for India's economy.

The minister reiterated that the market is unable to find a replacement for Iran's oil, urging Trump to abandon his plan to impose sanctions on the country.

"Saudi Arabia is a completely responsible country".

"Saudi Arabia's energy minister has dealt a fresh heap of bearish fodder onto the energy complex", quipped PVM Oil analyst Stephen Brennock.

Ministry confirms U.S. warships' Strait activity
Chinese security experts blasted the move by saying it suggests Washington would stand by Taiwan in case of a crisis with China. Navy has conducted such transits through the Taiwan Strait for years but have not publicized the transits since 2007.

The pledge comes despite Saudi Arabia's previous threats to retaliate to any sanctions with "greater action".

USA crude fell US$3.17, or 4.6 per cent, to US$66.19 a barrel, after hitting a session low of US$65.74, the lowest level since August 20.

Additionally, Fatih Birol, executive director of the International Energy Agency (IEA), said on Monday that other producers may struggle to fully make up for the expected Iran disruption, and that oil prices could rise further. "We work to stabilize global markets and to facilitate global economic growth", he added.

J.P. Morgan said it raised its 2019 Brent price forecast by a whopping $20.50 per barrel to $83.50 saying this "bullish argument is strongly driven by tighter supply due to Iranian sanctions and declining spare capacity".

There has been concern that just as markets tighten with the start of the US sanctions against Iran, Saudi Arabia could cut crude supply in retaliation for potential sanctions against it over the Khashoggi killing.

Saudi's foreign minister Adel al-Jubeir said to U.S. broadcaster Fox: "This was an operation that was a rogue operation".

"The big unknown is how much Iranian oil will be off the market and we'll know in about a month's time".

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