The EU strongly opposed Washington's decision to scrap the nuclear deal and has vowed to introduce a package of measures to protect trade with Iran. "But we have been more bullish than most in terms of how much we are going to lose from Iran and we believe we are going to lose 1.5-1.8 million barrels per day", Sen added.
Rouhani announced last week that Iran was moving its main oil terminal out of the Gulf to a port in the Oman Sea, so that its tankers would no longer need to pass through the strait, giving it more scope to disrupt supplies. The last vessel to make the journey was the supertanker Starla, which left on August 25 carrying two million barrels. US light crude fell $1.15 to a low of $69.22/Bbl, Kallanish Energy reports.
Iran, which is facing sanctions by the United States, saw its August production falling by 120,000 barrels per day.
The big surprise has been cuts by Asian buyers, which analysts expected to resist U.S. pressure, notably a 35 per cent drop by China and 49 per cent by India, according to the Eurasia Group consultancy. Tanker tracking compiled by Bloomberg indicates that OPEC's fourth-largest exporter is already having to store barrels amid dwindling demand.
In a move strongly opposed by Iran, OPEC had agreed in June to boost crude output by about a million barrels a day, AFP said, as the threat of sanctions stoked supply concerns on world markets. Exports fell 280,000 bpd reaching to 1.9 million bpd from a peak of 2.5 million bpd in May.
With the prospect of as many as 1-2 million barrels per day (bpd) of Iranian barrels being removed from global markets, both Saudi Arabia, likely bowing to pressure from Trump, and also Russian Federation, have already pledged to increase output to keep a ceiling on prices.
The sanctions, along with others imposed on Iran last month, are seen by some experts as an effort to force Iran to the negotiating table with a feint, rather than being serious policy.
It also said that oil prices are set to rise unless there is additional production increases elsewhere that will offset the supply losses.
Asian consumers of oil have begun to reduce purchases of Iranian oil and South Korea has reduced its imports Iranian crude to zero, on direct orders of the White House.
New geopolitical risks are also emerging in the Middle East as the Trump administration uses oil sanctions to achieve broad policy goals in Iran, said Michael Cohen, head of energy markets research at Barclays.