Meanwhile, Iranian oil exports may have risen in October as buyers took cargoes before USA sanctions on Tehran take effect from November 4.
US sanctions on Iranian oil take effect on November 4 and buyers are already stopping or scaling back their Iranian crude dealings, according to tanker data and industry sources.
In effect, the oil market found the pain threshold for the US administration, which lies at around $80 per barrel for Brent, and pushed prices high enough to enforce a partial course correction from policymakers. Oil traders are awaiting details from the Trump administration on potential waivers that would allow countries to continue buying at least some oil from Iran.
Crude jumped earlier this month as uncertainty persisted over whether the Organization of Petroleum Exporting Countries and its allies can offset supply losses from Iran after sanctions start in November.
Riyadh has now resorted to threats that have included hints at the use of its oil leverage to prevent the U.S. and allies from imposing sanctions over Khashoggi's fate. Inventories in the storage hub of Cushing, Oklahoma, also increased by 1.78 million barrels last week to more than 28 million barrels, the highest level in nearly four months.
After insistent and public prodding by President Donald Trump, Saudi Arabia and Russian Federation agreed to increase oil production, a move that will help alleviate a couple years of climbing prices.
"We do intend to continue our engagement with the USA and other stakeholders to ensure our energy security and to protect our national interest", he stated.
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Exports of Iranian crude oil have been in jeopardy since the White House announced that it is re-imposing unilateral sanctions against the Islamic Republic.
Reuters' data confirms earlier reports from TankerTrackers.com, which repeatedly warned that Iran's oil exports have not fallen by as much as official shipping data suggests: NIOC tankers began switching off their transponders to hide their routes earlier this year. The latest news in this due came on Tuesday, when National Iranian Oil Company (NIOC)'s Managing Director Ali Kardor announced that offering crude oil at Iran Energy Exchange (IRENEX) will be commenced on October 28 to thwart U.S. sanctions.
"The looming Iranian supply disruption and the conflict between the US and Saudi Arabia are pushing traders to take a cautious stance at the moment", Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone from Seoul.
Kumar said India's "expectations" have been made known to the US side, adding India appreciated the statement made by US Secretary of State Mike Pompeo that intention of imposing sanctions on Iran is not to hurt India.
He also said that the USA response to Saudi Arabia would likely be "very severe" but he would still want to get to the bottom of what exactly happened.
Countries such as Saudi Arabia already took all the measures to ensure that the market will be well-supplied.
OPEC has little spare capacity to make up for any drop in exports from Iran, which is the group's third-largest producer. China's imports from Iran fell to 430,000 bpd in September, the lowest amount since 2016.
Also denting confidence was evidence this week that US oil inventories had risen sharply.