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With sanctions taking effect, Iran's oil exports dropped and oil prices rose.
News of Iran's oil exports falling caused oil prices to rise on Friday, according to the Associated Press.
Reuters reported that Iran's oil exports had fallen significantly in March, according to industry sources, as sanctions came into effect and buyers stopped or scaled back purchases. Western sanctions were imposed to put pressure on Tehran to halt its nuclear program.
Crude exports from Iran fell by 300,000 barrels a day or 14 percent in March, according to estimates by consultant company Petrologisitics and a European oil company, said Reuters. It is the first recognizable drop in oil shipments since the European Union announced plans to embargo Iran's crude starting in July and Washington placed sanctions on Iran's central bank.
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The AP reported that the news of dropping exports caused oil prices to spike briefly to the highest level in three weeks.
Iran is the world's third largest oil exporter, and by decreasing its exports it has left less oil on the market, making the remaining amount more expensive. Oil prices on Friday hit $108.25 per barrel in the US, the highest since March 2. They finished the day at $106.87.
The International Energy Agency said it did not believe there would be disruptions to the global oil supply as Saudi Arabia and other producers would compensate for Iran's dropping exports, according to CNBC.
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Bloomberg reported that the Obama administration wants China, India and 10 other nations to present plans on how they will scale back Iranian oil imports. Earlier this week, Secretary of State Hillary Clinton granted Japan and European Union countries exemptions to the new US sanctions that will take effect June 28, saying they had "significantly" reduced imports from Iran.
US officials said India and China have not been granted exemptions because Japan and the EU said they would "go beyond past reductions" and continue to scale back purchases of Iran's crude. The EU has already banned new contracts as of Jan. 23 and embargoed Iranian oil as of July 1, said Bloomberg.
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