IMF Says U.S. Sanctions Have Pushed Iran's Economy Into Recession

Oil prices rise as Iranian crude exports fall

While Brent prices softened on Monday from $86 per barrel and was trading at $83.53 per barrel, traders worldwide are betting on crude oil prices to cross $100 yet again.

USA crude was down by 1 cent at $74.28 a barrel, having fallen as low as $73.07 in the previous session to close the day just 5 cents lower.

Currently, India pays Iran in euros using European banking channels but these would be blocked from November, said the report.

Secretary of State Mike Pompeo said on a visit to India in September that some waivers from the sanctions might be granted to countries buying Iranian oil, but only if they agreed to cut their imports to zero.

Iran's economy is expected to shrink by 1.5 percent in 2018 and by another 3.6 percent in 2019, the International Monetary Fund (IMF) said in the October update of its World Economic Outlook, heavily downgrading the Islamic Republic's growth prospects with the return of the US sanctions.

President Donald Trump has pulled the United States out of a historic 2015 accord with energy-rich Iran signed to curb the Islamic republic's nuclear programme in return for ending sanctions. Global crude oil prices had reached a record high of $147 per barrel in July 2009.

Indian refiners imported around 10 million barrels of Iranian crude in October, although its November shipments are likely to be lower. "Iran's oil can not be replaced by Saudi Arabia".

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Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, taking a major hit from USA sanctions and throwing a challenge to other OPEC oil producers as they seek to cover the shortfall. While private companies like Reliance and Nayara Energy (Essar) have had to drastically reduce their purchases, public sector companies, who are more immune to us strictures, and already have alternate banking arrangements and a "rupee-rial" mechanism, are staying the course for now.

US sanctions against Tehran are widely expected to have an immediate impact on Iran's oil exports, although the estimates of exactly how much of the country's oil could disappear from November 4 vary widely.

The International Monetary Fund (IMF) estimates that Iran's economy fell into a recession this year that will get worse next year as a result of renewed US sanctions on Tehran.

Strangely, the market has ignored the fact that total OPEC output last month was at its highest level this year; and also the fact that Russian Federation and Saudi Arabia had agreed informally to raise output in the coming months.

Singh said International Olympic Committee is importing the "usual" monthly volumes of oil from Iran.

If forecasts prove accurate, the hurricane would largely miss major oil-producing assets in the Gulf, analysts said, but a change of track could widen the impact. The American Petroleum Institute is due to release data on Wednesday, while the U.S. Energy Information Administration is due to publish on Thursday.

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