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Asked if the administration had a target in reducing Iranian oil exports in the next six months, Hook said, "I can't tell you what our target is; we do have a target".

Oil peaked in early October on concerns that US sanctions on Iran that came into force this week would drain global crude inventories and bring shortages in some regions.

Iraq, the second-largest producer within the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia, is targeting production capacity of 5 million bpd in 2019, up from 4.6 million bpd now, Oil Minister Thamer Ghadhban said on Tuesday.

Crude oil prices fell Tuesday, briefly entering bear market territory, after the USA said it will allow some of Iran's biggest customers to continue importing the Opec member's crude without violating reinstated us sanctions. The U.S. Energy Information Administration that said Wednesday oil inventories rose to 432 million barrels - the seventh week of increases.

Waivers granted to the sanctions intensify the market's perception that sanctions may not limit crude supply as much as initially expected. Analysts had predicted a draw of 2.572 million barrels for the week.

Chinese data earlier in the day that showed record oil imports offered some temporary respite to bearishness that has developed in the past couple of weeks over the expected crude market balance in 2019. "Six months from now, the USA will be producing more crude oil than the unverified sustainable production capacity of Saudi Arabia".

OPEC's output in October reached the highest level since 2016, while Russian Federation last month pumped 11.4 million barrels a day, a post-Soviet record. Iran has also written to the OPEC to discontinue the output deal with non-OPEC countries to be scrapped as they side with US.

Washington re-imposed sanctions against Iran's oil exports on Monday but granted waivers to its biggest customers, allowing limited imports for the next 180 days. A collision between an oil tanker and a military frigate off Norway's coast temporarily shut down the nation's largest crude-export terminal, halted the pumping of several North Sea grades, and boosted immediate natural gas prices in the United Kingdom. Demand is also slowing from emerging markets due to the strength of the dollar. Since the EIA report is positively correlated with API, can we expect EIA to report a build in inventories?

That will have profound implications not just for oil prices but, ultimately, geopolitics.