Friday, November 16, 2018

OPEC’s First Female President May Be Extradited Back To Nigeria



Nigeria is looking for the extradition of former oil minister and the first female president of OPEC from the UK to face trial in her home country, because a corruption investigation in Britain is taking too long, the head of Nigeria’s Economic and Financial Crimes Commission (EFCC) said on Monday.

Diezani Alison-Madueke served as petroleum minister of Nigeria between 2010 and early 2015 under then Nigerian president Goodluck Jonathan, until he was defeated in the elections by current president Muhammadu Buhari in 2015. Alison-Madueke was also the first female president of OPEC.
She was arrested in 2015 in London as part of a two-year-long investigation by the UK National Crime Agency (NCA) into global corruption, bribery, and money laundering. Alison-Madueke was released on bail after being questioned. She has been on bail ever since, according to AFP.

Police and investigators suspect that Alison-Madueke was involved in siphoning off billions of U.S. dollars from Nigerian oil deals and state accounts when she was overseeing Nigeria’s oil industry, for personal benefits, including for buying luxury homes in London and in Nigeria’s capital Abuja.

More than two years ago, a Nigerian ad-hoc parliamentary committee revealed that there were no formal contracts between the Nigerian National Petroleum Corporation (NNPC) and trading companies that received $24 billion worth of Nigerian crude oil between 2011 and 2014.

According to the results of the investigation, Alison-Madueke illegally allowed for a swap of Nigerian crude oil for refined products to trading firms Duke Oil and Trafigura.

The former Nigerian oil minister denies wrongdoing. Now Nigeria seeks extradition from the UK to put her on trial at home.

EFCC’s chairman Ibrahim Magu told a news conference in Abuja on Monday that “It is very unreasonable that she is not being tried there,” referring to the UK.

“That’s why I say, if you cannot prosecute her, bring her here. We will prosecute her... We cannot wait endlessly like this. I think three years and above is sufficient to take her to court,” AFP quoted Magu as saying.   

By Tsvetana Paraskova for Oilprice.com

Monday, November 12, 2018

NNPC Considers Crude-for-Product Deals with Shell and ExxonMobil


Nigerian oil company Nigerian National Petroleum (NNPC) is reportedly considering crude-for-product deals with Shell and ExxonMobil.

The potential deal could be similar to NNPC’s agreement with British firm BP last week, Reuters reported citing the former’s upstream chief operating officer Bello Rabiu.

NNPC depends on foreign imports for the country’s fuel needs as it buys 70% of the demand, especially gasoline, through swap deals with overseas companies.

The national oil company signed such contracts with ten consortiums, including Vitol, Trafigura, Mercuria and Total.

Rabiu was quoted by the news agency as saying: “Unfortunately, Shell and ExxonMobil exited the downstream sector in Nigeria a couple of years ago, but they are coming back for this particular arrangement because it’s an opportunity for them to get crude and sell their products to the refineries.

The company extended the existing contracts to June next year, however, several trading sources in the consortiums have reportedly sought new price terms.

Furthermore, Rabiu stated that the company aims to create savings of around $1bn, as achieved in 2016, during next year.

He further added that the existing arrangement of crude-for-product swaps could end once NNPC enhances its refineries.

Rabiu said: “If our refineries are back, which we want in the next 18 months, this thing will stop. So, all these things are just stop-gap measures, but the key issue is that we wanted to import at the least cost before our refineries come back on-stream.”

In a bid to reduce its dependence on fuel imports, the company has been engaged in discussions with consortiums such as traders, energy majors and oil services companies to improve its oil refineries. Talks are said to be in the final stages and the company is expecting to reach a deal by the end of this year.

Railed Refined Products to Mexico Hinge on Storage

https://theodora.com/pipelines/united_states_pipelines_map.jpg

Railed movements of refined products are a small portion of Mexico's total imports, but they will grow once Mexico builds new terminals and storage to handle increased traffic, industry officials said at the Argus Mexican Refined Products Markets conference.

Railed crude shipments from Canada to the US Gulf coast run along more efficient networks and offer better returns for energy companies looking to deploy their fleets of owned or leased railcars, said Jennifer Fussell, assistant vice president of sales and marketing for chemicals and petroleum at Kansas City Southern (KCS). The railway runs unit trains from US Gulf coast refining centers into central Mexico.

"These energy companies are looking at … crude by rail that's getting incredible turn times on equipment that is expensive, and then looking at the current infrastructure limitations for Mexico," Fussell said. "Those railcar turns are not as efficient, but they will be."

Terminals capable of unloading unit trains within 24 hours will be key to boosting railed refined products shipments, Fussell said. To that end, KCS said it expects substantial storage to be built in Mexico, to the tune of about 1.5mn bl each year from 2019-2021.

About 60pc of US refined exports to Mexico move by vessel, followed by pipeline at 20pc, truck at 12pc and rail at 8pc, based on an analysis of US cross-border trade data, said Rangeland Energy vice president of business development Michael Moss.

Rail could boost its share to 15-20pc of US refined products exports by 2020 as more terminals and storage are built, Moss said. Rangeland Energy's Corpus Christi products-by-rail and LPG loading terminal came on stream for manifest carload service in June, and is targeting unit train shipments by late in 2019.

Truck operations have had first-mover advantages in Mexico, with cross-border shipments from Corpus Christi and even Houston moving "deep into Mexico," Moss said. Trucking operations will be increasingly limited to border-area deliveries once rail and port options are built out, Moss said.

New international marine fuel rules set to go into effect in 2020 could create new opportunities for Mexico's rail networks.

Pemex's six refineries produce a large amount of high-sulfur residual fuel, which is mostly sold into the bunkers market from Mexico's ports. Once the marine fuels rules take effect, Pemex will need to find other markets for its high-sulfur material. Both Rangeland and KCS said they were targeting ways to tap additional business to carry fuel oil.

The new marine rules will be a significant challenge for Mexico and its refineries, said Jerry Phillips, global market analysis manager for Phillips 66. Mexico's refineries yield about 30pc high-sulfur residual fuel, versus about 3pc for US Gulf coast refineries, Phillips said.

Railroads could support imports of US light, sweet crude to Mexico, which could help Pemex's refineries decrease their residual fuel output because US crude has less sulfur content than many Mexican grades.

"There is no reason why clean products can't import in and crude import out, or even bringing some light sweet into the country," Fussell said. "We see that as an opportunity for Mexico."

Friday, November 9, 2018

Keystone XL pipeline project blocked by judge in Montana

Crewmen work on TransCanada's Keystone XL project near Winnsboro in Wood County in 2012.

https://www.houstonchronicle.com/business/energy/article/Keystone-XL-Pipeline-Project-Blocked-by-Judge-in-13377532.php

TransCanada Corp.’s long-delayed Keystone XL pipeline project was blocked by a Montana federal judge pending further environmental review.

Thursday night’s ruling is the latest set-back for the Calgary-based pipeline company in its decade-long push to construct a 1,179-mile long conduit to deliver crude from Alberta’s oil sands to a Nebraska junction, en route to refineries near the Gulf of Mexico.

The Indigenous Environmental Network, River Alliance and Northern Plains Resource Council filed a pair of lawsuits against the U.S. in March 2017 shortly after President Donald Trump gave his approval for the project to cross the U.S.-Canada border. TransCanada joined the litigation to defend the permit approval.

U.S. District Judge Brian Morris in Great Falls agreed with the groups’ argument that a 2014 environmental impact assessment fell short of the National Environmental Policy Act and other regulatory standards.

The judge barred both TransCanada and the U.S. from "from engaging in any activity in furtherance of the construction or operation of Keystone and associated facilities" until the U.S. State Department completes a supplemental review.

Morris was appointed in 2013 by then-President Barack Obama, who had refused to grant a cross-border permit for the international project. Morris has ordered it vacated.

Nebraska’s Supreme Court last week heard arguments from attorneys for landowners seeking to overturn that state’s public service commission approval of its route there.

The case is Indigenous Environmental Network v. U.S., 17-cv-00029, U.S. District Court, District of Montana (Great Falls).

©2018 Bloomberg L.P.

Zero US Crude oil exports to China recorded for second month

The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.  
Eddie Seal | Bloomberg | Getty Images
The Eagle Ford crude oil tanker sails out of the the NuStar Energy dock at the Port of Corpus Christi in Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016.


The lack of US seaborne exports of crude oil to China recorded in August, continued into September. 
 
This is despite crude oil not being a part of the ‘official trade war’, BIMCO’s Peter Sand said.

 “The trade war between the US and China is now impacting trade in both tariffed and some untariffed goods with both countries looking elsewhere for alternative buyers and sellers.

“Tonne/mile demand generated by total US crude oil exports has risen 17% from August to September, but is down 4.8% from the record high in July.

“For the crude oil tanker shipping industry distances often matter more than volumes, with exports of US crude oil to Asia generating 74% of tonne/mile demand in September, up from 70% in August,” Sand explained.

In 2017, Chinese imports accounted for 23% of total US crude oil exports. For the first seven months of this year, the number was 22%, but has dropped to zero in August and September.

For the seventh month in a row, total US crude oil exports, excluding to china, hit a new all-time high reaching 7.9 mill tonnes in September.

South Korea has become the largest long-distance importer of US crude oil taking 1.1 mill tonnes in September, the highest level. Similarly, the next top three overseas importers of US crude oil, namely the UK, Taiwan (both at 0.94 mill tonnes) and the Netherlands (0.74 mill tonnes) all imported more in September than before.

Exports to Asia jumped in June and July, from a 43% share of total exports since the start of 2017 to reach a 56% share. This share was down to 46% in August, but climbed back to 51% in September.

The two other major importing regions in September were Europe (33%) and North and Central America (13%), while South America (2%), the Caribbean (1%) make up the rest.

Thursday, November 8, 2018

Venezuela to Present Petro to Intergovernmental Group OPEC as Unit of Account for Oil

Venezuela to Present Petro to Intergovernmental Group OPEC as Unit of Account for Oil
Venezuela will present its state-backed cryptocurrency Petro as a unit of account for crude oil trading to the Organization of the Petroleum Exporting Countries (OPEC) in 2019, the country’s oil company PDVSA reports on its Twitter Nov. 7.


The PDVSA has cited its president Manuel Quevedo, who also holds the position of Venezuela’s Minister of Oil and Mining, speaking about the future presentation:
"We will be presenting Petro to OPEC in 2019 as the main digital currency backed by oil."
According to the PDVSA, Quevedo also added that Petro will be offered as a unit of account for global crude oil trading, noting that all Venezuelan oil will be traded for Petro.

OPEC is a global intergovernmental organization made up of 15 nations, founded in 1960 in Baghdad to develop regulation and policies for the world’s main oil exporters. According to OPEC’s website, the organization has not yet scheduled its agenda for 2019; the nearest meeting of the oil industry members will be held Dec. 6 in Vienna, Austria.

Venezuela officially launched the sale of its widely discussed oil-backed cryptocurrency at the end of October. 11 months after country’s leader announced the national coin, Petro can now be purchased directly from its official website or from six local crypto exchanges authorized by the government. However, crypto wallets for trading the coin have reportedly been suspended by Google.

As Cointelegraph has often reported, the Venezuelan government is actively promoting Petro. For instance, Maduro appealed to the county’s citizens in October, asking them to invest in gold and Petro while the national currency, the sovereign bolivar, is facing hyperinflation.

The country’s president also stated that Petro would be used for international commercial transactions starting in October 2018. Moreover, Venezuela announced that the currency would be used as a unit of account within the country, making salaries and pricing systems tied to Petro.

However, some experts, journalists, and economists are sceptical about Venezuela’s coin. A Reuter's report claimed that Petro was not backed by oil nor mined anywhere in the country. The news agency also cited former Oil Minister Rafael Ramirez who wrote that "the petro [...] only exists in the government’s imagination.”

Experts also told media outlet Wired that PDVSA, which reportedly backs Petro, had $45 billion in debt and showed no signs of any trading activity. The publication noted that this might mean the currency is only a "smoke curtain" to conceal Maduro's recent failure to reanimate the national fiat currency.

Wednesday, November 7, 2018

World’s Most Indebted Oil Company Reports 20-Fold Increase in Profit

Petrobras offices in Rio de Janeiro


Brazilian state-run oil firm Petrobras (NYSE:PBR) reported on Tuesday a net income for Q3 surging more than 20 times compared to the profit for the same quarter last year on the back of higher oil prices. 

Petrobras reported a consolidated net income of US$1.77 billion (6.644 billion Brazilian reais) for Q3 2018, up from just US$70 million (266 million reais) for Q3 2017. Compared to the second quarter of 2018, Petrobras’s net income dropped by 34 percent, due to higher net financial expenses and increased income tax expenses, the company said in its earnings release. In the second quarter of 2018, Petrobras had reported an even stronger surge in earnings, as net income jumped thirty-fold on the year, benefiting from the rising oil prices.

The third quarter this year was the third consecutive quarter in which Petrobras has booked a profit, it said.

Petrobras’s domestic crude oil and natural gas liquids (NGLs) production, however, dropped in the third quarter—at 1.937 million bpd, it was 6 percent lower compared to Q2 2018 and lower than the 2.134 million bpd production in Q3 2017.

The company attributed the lower production of oil, NGLs, and natural gas mostly to maintenance and the sale of a 25 percent stake in the Roncador field, partially offset by the start of production of the FPSO Cidade dos Campos dos Goytacazes in the Tartaruga Verde Field.

Related: Analysts See Opportunities In Embattled Energy Stocks

For the nine months January to September, Petrobras’s crude oil and NGL production in Brazil declined by 6 percent to 2.028 million bpd.

For the nine months to September, Petrobras reported a net income of US$6.3 billion (23.677 billion reais), the best result since 2011 and a 371-percent surge compared to the same period of 2017, thanks to higher oil prices, the depreciation of the Brazilian currency, higher diesel sales, and lower general and administrative expenses.

Petrobras, considered the most indebted oil company in the world, said that its net debt was US$72.888 billion at end-September, down by 14 percent compared to end-2017, and down from the US$73.662 billion net debt at end-June 2018.

By Tsvetana Paraskova for Oilprice.com

Monday, November 5, 2018

Oil up as U.S. imposes sanctions on Iran, Tehran defiant

Iraqi Shi'ite Muslims hold portraits of Iran's late leader Ayatollah Ruhollah Khomeini (C), Supreme Leader Ayatollah Ali Khamenei (L) and Iraq's top Shi'ite cleric Grand Ayatollah Ali al-Sistani during a parade marking the annual al-Quds Day.
Iraqi Shi'ite Muslims hold portraits of Iran's late leader Ayatollah Ruhollah Khomeini (C), Supreme Leader Ayatollah Ali Khamenei (L) and Iraq's top Shi'ite cleric Grand Ayatollah Ali al-Sistani during a parade marking the annual al-Quds Day.
Image: KHALID AL-MOUSILY


By Stephanie Kelly

NEW YORK (Reuters) - Oil prices rose on Monday after a steep five-day slump, as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic.

The sanctions are part of U.S. President Donald Trump's effort to curb Iran's missile and nuclear programs and diminish its influence in the Middle East. 

Oil markets have been anticipating the sanctions for months. Prices have been under pressure as major producers including Saudi Arabia and Russia have ramped up output to near-record levels, while weak economic figures in China have cast doubt on the demand outlook.

News of waivers on the sanctions limited price gains, and recent weakness in equities markets have fed concerns about global oil demand, said Bob Yawger, director of futures at Mizuho in New York.
"We're not getting the price rally that many participants thought they were going to get out of the Iran sanctions situation," Yawger said.

Brent crude futures gained 89 cents to $73.72 a barrel, by 10:59 a.m. EST (1559 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 57 cents to $63.71 a barrel.

Both oil benchmarks have slid more than 15 percent since hitting four-year highs in early October. Hedge funds have cut bullish bets on crude to a one-year low.

The United States has granted exemptions to eight countries, China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, allowing them to temporarily continue buying Iranian oil, Secretary of State Mike Pompeo said on Monday. Some of these are OPEC member Iran's top customers.

U.S. officials have said the aim of the sanctions is eventually to stop all Iran's oil exports. 

Pompeo said more than 20 countries have already cut oil imports from Iran, reducing purchases by more than 1 million barrels per day.

Iran said on Monday it would break with the sanctions and continue to sell oil abroad.

China's foreign ministry expressed regret at the U.S. move.

Combined output from Russia, the United States and Saudi Arabia rose above 33 million bpd for the first time in October, up 10 million bpd since 2010, with all three pumping at or near record volumes.

The Abu Dhabi National Oil Co plans to boost oil production capacity to 4 million bpd by the end of 2020 and to 5 million bpd by 2030, it said on Sunday, from output of just over 3 million bpd.

Data from analysis firm Kayrros showed Iranian crude production was broadly unchanged in October from September, with barrels still hitting the market alongside additional production from Saudi Arabia and Russia. 

(Reporting by Stephanie Kelly in New York, Christopher Johnson in London and Henning Gloystein in Singapore; editing by Jason Neely and Louise Heavens)

‘Lomonosov Prospect’ successfully completes NSR transit

Lomonosov Prospect


On 30th October, 2018 at 23:59 Moscow time, ‘Lomonosov Prospect’, Sovcomflot's (SCF) Aframax using LNG fuel as its primary fuel, successfully completed a commercial voyage along the Northern Sea Route (NSR).
 
She delivered a petroleum product cargo loaded in South Korea and destined for Northern Europe.

The high-latitude voyage from Cape Dezhnev at Chukotka to Cape Zhelaniya of the Novaya Zemlya archipelago took the Arc4 vessel 7.8 days to complete, during which the tanker covered a distance of 2,194 nautical miles.

During the voyage, the crew successfully tested the ship’s engines and the fuel control systems using LNG, as well as the operation of navigation equipment and machinery in ice conditions and sub-zero temperatures.

The successful voyage has confirmed the vessel’s high manoeuvrability and icebreaking capabilities, as well as being a highly safe, environmentally friendly and efficient vessel, SCF claimed.

The tanker sailed along almost the entire NSR without icebreaker escort, having covered some 950 nautical miles in ice conditions. She was escorted by Atomflot's nuclear-powered icebreaker ‘Taimyr only when traversing the most navigationally and hydrographically challenging area of the Ayon ice massif in the East Siberian Sea.

The tanker’s Master was Dmitry Belozerov, who has extensive high-latitude navigation experience. In 2010, Capt Belozerov served as Chief Officer on SCF's Aframax ‘SCF Baltica – the first large-capacity vessel to complete an NSR transit.

The results obtained during this experimental voyage provided the foundation for developing marine transportation solutions for major industrial projects in the Arctic, such as Yamal LNG and Novy Port.

During the latest voyage, the crew was aided by a second Master/ice advisor.

‘Lomonosov Prospect is the second of six Aframaxes designed to operate on LNG as the primary fuel. She was delivered to SCF last month.

In September, 2018, SCFplaced with Zvezda Shipbuilding Complex orders for a series of two similar LNG-fuelled Aframaxes, both of which will be timechartered to Rosneft for 20 years each, following their deliveries.

In addition SCFwill provide technical supervision during the construction of the five similar LNG-fuelled Aframaxes for Rosneft, also ordered at Zvezda Shipbuilding Complex.
 
Upon the delivery of these vessels, SCF will provide a range of services to ensure the effective and safe management of these vessels, including the recruitment of high-skilled crews and their management.

Sunday, November 4, 2018

Oil rally faces tidal wave of supply

Trump blamed OPEC


By Devika Krishna Kumar and David Gaffen

(Reuters) - The oil market's two-year bull run is running into one of its biggest tests in months, facing a tidal wave of supply and growing worries about economic weakness sapping demand worldwide. 

After topping out at more than $75 and $85 a barrel just a month ago, both U.S. crude and Brent benchmark futures have grappled with near-relentless selling. For a time, prices had some support on hopes that renewed U.S. sanctions on Iran would force barrels off the market. 

That changed in the last week. The world's three largest producers - Russia, Saudi Arabia and the United States - all indicated they were pumping at record or near-record levels, while the United States said it would allow waivers that could allow buyers to keep importing Iranian oil, lessening the threat of a supply crunch. 

Those factors, along with a spate of recent weak economic reports out of China and other emerging markets, have shifted the conversation back toward worries about oversupply, and pushed U.S. futures to lows not seen since April, interrupting an upward move that had consistently found support during the rally's modest pullbacks.

The structure of the U.S. crude futures curve had for several months indicated expectations for tighter supply, but future-dated contracts now suggest investors think markets could be awash in oil over the coming months.

"The magnitude of recent selling is strongly suggesting that global oil demand is weaker than expected as a result of tariff issues, especially between the U.S. and China," said Jim Ritterbusch, president of Ritterbusch & Associates. 

There has been an exodus among speculators as well. In the last two weeks, net bullish bets on oil have declined to the lowest level in over a year. Selling notably accelerated on Thursday after U.S. West Texas Intermediate crude futures fell below $65 a barrel, a level that had stood firm in previous selloffs during the summer and fall. 

The oil market ran higher in anticipation of this week's formal re-imposition of sanctions against Iran by the United States, and on concerns that supply from producers like Saudi Arabia would not be able to make up the difference.

However, the U.S. government said on Friday it will temporarily allow several countries including South Korea and Turkey to keep importing Iranian oil when U.S. sanctions come back into force on Monday, sparing them for now from the threat of U.S. economic penalties.

Still, some analysts believe the current selloff has come too far, too quickly. Major OPEC producers won't be able to add more supply should it become necessary, particularly with production in Iran, Venezuela and Libya still at risk. 

"A loss of 1 million bpd from Iran, further declines in Venezuela, coupled together with geopolitical disruption in Libya and Nigeria could easily wipe out what little spare capacity we have left," Bernstein analysts said this week. 

Output from the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, rose to levels not seen in two years. U.S. production hit a record 11.3 million barrels a day in August, and Russia's output rose to 11.4 million bpd, a post-Soviet era peak. 

For U.S. crude, the key area to watch is between $64.45 and $64.80, where prices had found support in the past, said Fawad Razaqzada, analyst at futures brokerage Forex.com. If oil dips below this point, "the path of least resistance would be to the downside," he said.

For Brent, Razaqzada is watching the range between $69.50 and $69.60 a barrel, and if it were to slip below that, we could see a much larger correction, he said. 

(Reporting By David Gaffen and Devika Krishna Kumar in New York; Editing by Andrea Ricci)

Friday, November 2, 2018

Finance Companies Express Interest in Port Harcourt Refinery


https://www.petroleumafrica.com/finance-companies-express-interest-in-port-harcourt-refinery/

NNPC, Nigeria’s state-owned oil company, revealed that a number of the finance companies it has approached to modernize the country’s refineries have expressed interest in the modernization of the Port Harcourt refinery.

“About three finance companies have expressed interest in the Port Harcourt refinery,” said a NNPC statement signed by NduUghamadu, Group General Manager, Group Public Affairs Division.

The official assured that according to the schedule set by the Ministry of Petroleum, the refineries will be fully operational by 2019 and will add their production capacity to that of the Dangote refinery that is currently under construction. The modernization of its refineries, along with the addition of the Dangote refinery, will bring the West African nation one step closer if not to the final step to the end of costly petroleum product imports.

The combined capacity of the Kaduna, Warri and Port Harcourt refineries is currently 445,000 bpd. The goal of the Nigerian government is to increase this production capacity.

Thursday, November 1, 2018

Trump will reportedly allow India and South Korea to keep buying sanctioned Iranian oil

 
Indian Prime Minister Narendra Modi and U.S. President Trump hold a joint news conferences at the White House. Kevin Lamarque/Reuters


https://www.cnbc.com/2018/11/01/trump-near-deals-with-india-south-korea-on-iran-oil-imports-reports.html
  • The Trump administration has agreed to allow India and South Korea to continue buying some Iranian crude, according to reports.
  • Washington is threatening sanctions against countries that continue importing oil from Iran after a deadline on Nov. 4.
  • Without waivers to continue purchasing Iranian oil after the deadline, foreign firms face the risk of being locked out of the U.S. market.
The United States is poised to grant waivers to India and South Korea that will allow the countries to continue buying oil from Iran, despite the renewal of U.S. sanctions next week, according to news reports.

The Trump administration gave oil buyers 180 days to wind down purchases of Iranian crude in May, when President Donald Trump announced he was abandoning a nuclear accord with Iran and restoring sanctions on its economy. The administration told importers to completely cut off purchases by Nov. 4, but it is widely expected to allow some countries to continue reducing purchases beyond that date.

On Thursday, the Economic Times reported that the administration will allow India to purchase 1.25 million tons of Iranian oil each month through March. A source told the English-language Indian newspaper that India and Washington have "broadly agreed on a waiver" and that "India will cut import by a third."

India, the second largest purchaser of Iranian oil, imported about 22 million tons from Iran in the 2017-2018 period, according to the paper.

High crude prices and a deteriorating Indian rupee have caused oil price inflation in the country and sparked protests over fuel costs. While Brent crude is trading at about $75, India is essentially paying double that after inflation, Fatih Birol, executive director of the International Energy Agency told CNBC this week.

The payment mechanism remains uncertain, but India is expected to continue paying for Iranian oil in euros and rupees, sources said. Iran would use rupees to pay for rice, drugs and other items, while the balance of revenues would be held in escrow until sanctions are lifted, the Economic Times reported.
Bloomberg News later reported that South Korea, in addition to India, has agreed to the outlines for a waiver with the United States. Bloomberg also reported that funds from Indian imports would go into an escrow account.

Sources told both news outlets an announcement from the administration could come in the next few days. The State Department did not immediately return a request for comment.
Several other oil importing nations are also seeking waivers.

Japan's top spokesperson for the government on Thursday said the nation had yet to receive a waiver, Reuters reported. China, Iran's biggest oil customer, has also sought a waiver, and its biggest refiners have reportedly halted imports in November until Beijing gets clarity from Washington.

U.S. sanctions have cut Iran's exports by roughly a third, with shipments shrinking to roughly 1.7 million to 1.9 million barrels per day by the end of September, according to estimates from several sources.

 

The sanctions were developed by Congress and implemented by the Obama administration, which marshaled international support for the policy in order to put pressure on Iran to negotiate restrictions on its nuclear technology program. The United States and five world powers reached a deal with Iran in 2015 that paved the way for sanctions relief the following year.

The Trump administration, hoping to secure a tougher nuclear accord and force changes to Iran's foreign policy, pulled the United States out of the accord in May over widespread international objection. The European Union is trying to preserve the nuclear deal, but the continent's multinational companies have dropped business ties with Iran under threat of U.S. sanctions.

The Obama administration allowed some foreign firms to gradually wind down their purchases from Iran so long as their home country reduced imports by 20 percent every 180 days. The Trump administration has not announced hard terms for waivers.