Oil prices down 20% in a month as fundamentals weaken

Iranian Foreign Minister Mohammad Javad Zarif

Iranian Foreign Minister Mohammad Javad Zarif

"We sincerely hope there will be no accidents, but accidents are a very real possibility, given Iran's record", Hook said.

On Monday, as part of the Trump administration's "maximum pressure campaign" to get Iran to change its behavior, the USA reimposed oil and banking sanctions on Iran that were lifted under the 2015 nuclear deal.

"The introduction of United States sanctions earlier this week against Iran failed to lift the market given the announcement that eight countries, including three of the world's biggest importers, would receive waivers to carry on buying Iranian crude for up to six months", Hansen said.

But there was no clarity or response to whether if USA was considering waiver for Chabahar and the International North-South Trade Corridor (INSTC).

India has poured $2 billion into Afghanistan since the 2001 US-led overthrow of the Taliban regime, which was also opposed by Iran.

The United States will exempt from sanctions the development of Chabahar along with an attached railway project and Iranian petroleum shipments into Afghanistan, the State Department said.

But with Iran sanctions now in place and oil still in ample availability, OPEC-led production cuts next year can not be ruled out, two OPEC sources said on Wednesday.

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Rick Rossow of the Center for Strategic and International Studies said: "Chabahar's role to transport key logistics to Afghanistan will continue to grow over time".

Adding that while the "exception" has been granted after much deliberation, the strategic importance of these projects can not be ignored.

Iranian officials have said the waivers provide proof that the United States can not achieve its goal of cutting off all of Iran's oil exports.

"These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief", the spokesman said in a statement emailed to Reuters.

"This exception relates to reconstruction assistance and economic development for Afghanistan", he said.

In October-November 2017, India successfully despatched an inaugural consignment of around 15,000 tons of wheat from the Indian port of Kandla in Gujarat to Afghanistan via Chabahar, in line with its commitment to provide 1.1 million tons of wheat to Afghanistan on a grant basis.

The exemption for Chabahar comes as good news for India and Afghanistan, but undercuts the Trump administration's portrayal of the sanctions as the "toughest ever". Meanwhile, the report also noted that China and India's imports from Iran remained fairly consistent throughout the year, and both governments have shown little sign that they intend to fully comply with the sanctions.

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