Oil prices have risen about one per cent on growing evidence of falling Iranian crude exports before the imposition of new US sanctions, as well as a partial production shutdown in the Gulf of Mexico because of Hurricane Michael.
Brent crude futures rose $US1.09 to settle at $US85 a barrel, a 1.30 per cent gain.
The global benchmark hit a four-year high of $US86.74 last week but slipped as low as $US82.66 on Monday.
US West Texas Intermediate crude futures rose 67 cents to settle at $US74.96 a barrel, a 0.90 per cent gain.
Iran’s crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of US sanctions that take effect on November 4.
Iran, OPEC’s third-largest producer, exported 1.1 million barrels per day of crude in that seven-day period, Refinitiv Eikon data showed.
An industry source who also tracks exports said October shipments so far were below 1 million bpd.
That is down from at least 2.5 million bpd in April, before US President Donald Trump in May withdrew the United States from a 2015 nuclear deal with Iran and re-imposed sanctions.
The figure also marks a further fall from 1.6 million bpd in September.
A vessel carrying two million barrels of Iranian oil discharged the crude into a bonded storage tank at the port of Dalian in northeast China on Monday, according to Refinitiv Eikon data and a shipping agent with knowledge of the matter.
The country previously held oil in storage at Dalian during the last round of sanctions in 2014 that was later sold to buyers in South Korea and India.
Saudi Arabia, the biggest producer in the Organisation of the Petroleum Exporting Countries, last week said it would increase crude output next month to 10.7 million bpd, a record.
Iranian Oil Minister Bijan Zanganeh on Monday described a Saudi claim that the kingdom could replace Iran’s crude exports as ‘nonsense.’
‘There is growing concern that suppliers such as Saudi Arabia and Russia will struggle to compensate for potential production declines from Iran and Venezuela, which has supported oil prices in today’s trading session,’ said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
Meanwhile, producers in the US Gulf of Mexico on Tuesday cut oil production by about 40 per cent as Hurricane Michael approached the Florida coast, the Bureau of Safety and Environmental Enforcement said, citing reports from 27 companies.
If forecasts prove accurate, the hurricane would largely miss major oil-producing assets, analysts said, but a change of track could widen the impact.
The International Monetary Fund on Tuesday cut its global economic growth forecasts for 2018 and 2019, saying trade tensions and rising import tariffs were taking a toll on commerce while emerging markets struggle with tighter financial conditions and capital outflows.
Industry and government data on US crude inventories will be delayed by one day this week because of Monday’s US Columbus Day holiday.
The American Petroleum Institute is due to release data on Wednesday, while the US Energy Information Administration is due to publish on Thursday.