The stipulated deadline for the imposition of the American sanctions on Iran is less than a month away with the date being set at 4th November. However, the effects of the upcoming sanctions are being felt immediately – especially when it comes to crude oil supplies.
The cost of the Brent Crude rose to over $86 per barrel on Thursday, on the back of the expected sanctions against Iran which would mean that countries won't be able to import crude from the Middle-Eastern country. This has prompted analysts to point out that the cost of the crude could rise to $90 per barrel in the near future and even cross the $100-mark in 2019.
Meanwhile, Reuters reported on Wednesday that Saudia Arabia and Russia had agreed to increase the production of crude ahead of the Joint Ministerial Monitoring Committee (JMMC) meeting in Algiers in September. At the meeting though, which had delegations from the other member countries of the OPEC (Organisation of the Petroleum Exporting Countries), it was decided that the production of the crude would not be increased.
Now, this increase in the crude prices coming in after the revelatory agreement between Saudi Arabia and Russia fuels worry among countries for whom crude remains the most important import. India and China, which used to import their crude from Iran, face hastened worry as the impending sanctions on Iran mean that they can't avail of the Iranian crude and need to look at other suppliers.
The problem mushrooms for India, whose currency, the rupee is slipping to newer lows day-by-day against the dollar and where petrol and diesel prices have already skyrocketed.