Saudi Aramco is getting ready to sell additional cargoes to the Asian refiners who are the biggest consumers of crude oil.
The U.S. sanctions on Venezuela and Iran is bound to bring in demand for crude oil. Further, oil supply from Russia has also come down, with the contaminated oil issue.
The sanctions on Iran oil was set to end on May 2. The U.S. officials have decided to not renew the sanction of Iranian oil to select Asian countries. This has tightened the global oil market.
Brent was trading higher at $70.31 per barrel, which was an increase of 0.6 percent on Wednesday. U.S. West Texas Intermediate crude futures were trading at $61.96 per barrel, which is 0.9 percent above the previous close.
India is showing a very high demand for crude oil, requiring almost 200,000 barrels as additional supply. China is, however, the highest importer of crude oil. Japan is also in need of additional shipments of oil.
Oil supply has remained disrupted recently. The U.S. sanctions and the Russian issue regarding contaminated oil shipment have brought another bout of pressure on crude oil prices. To meet rising needs, Saudi Arabia is increasing production.
China oil import has risen to a record value of 10.64 million barrel. Imports for the first four months are at an average of 10.03 million barrels per day, which is up by 8.9 percent on a year-on-year comparison.
Meanwhile, Iran has said that it would defy the sanction from the U.S. and continue its oil exports. However, analysts feel that crude export from Iran will fall below 500,000 bpd, while it was 1 million bpd in the month of April. Iran will have to oblige with the U.S. sanctions, feel experts.
Meanwhile, U.S. oil production has surged this year. Production is expected to increase to 12.45 million barrels per day, up from the current 12.3 million barrels per day.