Iran announces plan to circumvent U.S. oil sanctions

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"Member nations of the Organisation of Petroleum Exporting Countries (OPEC) and the leading non-OPEC oil producer Russian Federation, should maintain the Algiers Pact they forged in September 2016 so that oil prices will continue to ramp up", Sonatrach CEO Abdelmoumen Ould Kaddour said.

"Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue on crude-oil sales", Brian Hook, the State Department's director of policy planning, said at a briefing.

President Trump also touted the promise in a tweet Saturday. On Monday, Hook expressed confidence that the USA sanctions policy would not prompt mass shortages, but analysts have expressed doubt that Saudi Arabia can increase production by as much as Trump described.

Last month President Donald Trump withdrew the United States from the landmark Iran nuclear deal, re-imposing USA sanctions that had been suspended in return for curbs on Tehran's nuclear programme.

If Mr Trump's tweets are taken as policy, it means the United States is assuming a 2 million barrel-a-day increase is readily available from the Saudis, a relationship that has already been leveraged "to the maximum extent".

As president he has made more direct attacks on the organisation than any of his predecessors in a string of attempts to stabilise the oil market and push Saudi Arabia to increase its capacity.

Outside North America, looming US sanctions against major oil exporter Iran were the focus of attention. This will include allowing private companies to directly export the oil.

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Crude oil prices rose on Tuesday with the USA benchmark hitting a four-year high on expected drains in domestic inventories and outages in Libya.

Saudi Arabia agreed on Tuesday to make use of its spare production capacity to deal with changes in the level of supply and demand.

This most recent Twitter post also made it look like U.S. policy is reliant on Saudi Arabia's spare capacity to fill global supply gaps, the analysts wrote.

Oil sanctions on Iran are expected to resume on November 4, two days ahead of congressional midterms.

The debate at this time is how to compensate for disruptions in Libya, Venezuela and Iran.

Inventories at Cushing fell 2 million barrels last week, according to a separate forecast compiled by Bloomberg. "If production increases as we now forecast, a large share of this would be eroded, leaving the global oil market with a limited "margin of safety", said Morgan Stanley's Rat. "But as with our other sanctions, we are not looking to grant waivers or licenses".

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