Oil prices fall on reports US will allow eight countries to buy oil from Iran despite sanctions

Oil prices continued to fall on Friday on reports that the US has agreed to let eight countries keep buying Iranian oil after it reimposes sanctions next week.

Washington has granted eight nations, including South Korea, Japan and India, waivers on sanctions on Iran, due to kick in on Monday, according to Bloomberg.

Brent crude prices dropped below $73 per barrel as long-standing supply fears were eased by the potential waivers.

Earlier this month Brent crude was trading at $86 per barrel, its highest in four years.

WTI Crude dropped to $63 per barrel as an oil production boost also contributed to the price drop.

Oil cartel Opec, which includes oil producers such as Saudi Arabia, Qatar and Iran, said production in October reached 33.31m barrels per day – the highest since 2016.

Russia, outside Opec, reported an October production of 11.41m barrels per day – a 30-year high.

Production had been increased across a number of nations to control surging prices ahead of the impending US sanctions on Iran.

But Washington is expected to announce the full list of countries allowed to continue buying oil from Iran on Monday.

Energy analyst at the Economist Intelligence Unit, Peter Kiernan, said: “The reported awarding of waivers by the US for up to eight countries to continue buying Iranian oil, on the basis that they reduce volumes, shows that in the short term at least the Trump administration has set aside the goal of trying to cut Iran's oil exports to zero.

He added: “Although there are concerns of weakening oil demand in 2019 the underlying fear is that an abrupt shut off of Iranian supply would cause a spike in prices and leave oil consuming economies scrambling to buy oil elsewhere.