Oil weakens amid expectation that some Iranian imports will keep flowing

London — Oil dropped to about $83 a barrel on Monday, pressured by the expectation that some Iranian oil exports will keep flowing after the US reimposes sanctions, easing a strain on supplies.

Two companies in India, a big buyer of Iranian oil, have ordered barrels in November, India’s oil minister said on Monday.

The Trump administration is considering waivers on sanctions, a US government official said on Friday.

“One way or another, it looks as though India is going to take some Iranian crude,” said Olivier Jakob of Petromatrix, adding that the development was helping oil to “retrace some of the price surge we saw last week”.

Brent crude, the international benchmark, was down $1.07 to $83.09 a barrel at 8.17am GMT. It hit a four-year high of $86.74 last week.

US crude was down 93c at $73.41.

US sanctions will target Iran’s crude oil exports from November 4, and Washington has been putting pressure on governments and companies worldwide to cut their imports to zero.

“This is one of the single biggest supportive factors for crude,” said analysts at JBC Energy of the US re-imposition of Iran sanctions. “Having said that, it may well be that we are already in the most supportive phase coming from this change and the effect will soon begin to ease.”

Oil also dropped as investors focused on rising output from other producers, such as top exporter Saudi Arabia, to compensate for lower Iranian supplies.

Saudi Arabia said last week it plans to raise production in November from October output of 10.7-million barrels a day, indicating Riyadh will be boosting its supply to the highest ever level.