Crude oil futures traded marginally higher on Wednesday morning after the US imposed sanctions on 35 entities and vessels that play a critical role in transporting Iranian petroleum to foreign markets.
At 9.46 am on Wednesday, February Brent oil futures were at $73.68, up by 0.08 per cent, and January crude oil futures on WTI (West Texas Intermediate) were at $70.02, up by 0.11 per cent.
December crude oil futures were trading at ₹5,937 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹5,929; up by 0.13 per cent, and January futures were trading at ₹5,923 against the previous close of ₹5,920; up by 0.05 per cent.
A press release by the US Department of Treasury, said these sanctions impose additional costs on Iran’s petroleum sector following Iran’s attack against Israel on October 1, as well as Iran’s announced nuclear escalations, building upon the sanctions issued on October 11. Petroleum revenues provide the Iranian regime with the resources to fund its nuclear programme, develop advanced drones and missiles, and provide ongoing financial and material support for the terrorist activities of its regional proxies, it said.
The Acting Under Secretary for Terrorism and Financial Intelligence, Bradley T Smith, said Iran continues to funnel revenues from its petroleum trade toward the development of its nuclear programme, proliferation of its ballistic missile and unmanned aerial vehicle technology, and sponsorship of its regional terrorist proxies, risking further destabilizing the region.
“The United States remains committed to disrupting the shadow fleet of vessels and operators that facilitate these illicit activities, using the full range of our tools and authorities,” Smith said.
Iran is one of the major producers of crude oil in West Asia.
Market is also waiting for the outcome of the OPEC+ (Organization of the Petroleum Exporting Countries, and allies) meeting on December 5. Market reports indicated that the proposed meeting could delay the increase in crude oil production output due to factors such as weakness in crude oil prices and concerns over the declining demand for the commodity in some of the important consuming markets.
Meanwhile, the industry body American Petroleum Institute’s (API) data showed an increase in crude oil inventories in the US for the week ending November 29. According to API, crude oil inventories increased by 1.23 million barrels for the week ending November 29. Market was expecting it to decline by 2 million barrels during the period.
December menthaoil futures were trading at ₹934 on MCX during the initial hour of trading on Wednesday against the previous close of ₹929.50, up by 0.48 per cent.