Iranian heavy crude oil price rises $1.45 per barrel in Jan.: OPEC

Venezuela's President Nicolas Maduro gestures during a news conference at Miraflores Palace in Caracas Venezuela

Refineries are built to handle a certain quality of crude, and those which process so-called heavy crude from Venezuela, Canada or the Middle East can not be easily converted to treat the light shale oil that is now being produced in greater quantities in the United States.

The new round of sanctions targeting Iran's oil sector were put in action on November 4, 2018.

International Brent crude futures were up 1 percent, or 65 cents, at $63.07 per barrel.

Sechin said in the letter that the supply cuts with OPEC play into the hands of the U.S., which has emerged as the world's largest oil producer.

The global oil market remains well supplied, the International Energy Agency said in its monthly market report on Wednesday, and output would still likely outstrip demand this year, despite OPEC's efforts and USA sanctions on Iran and Venezuela. The upshot is that the world is seeing a glut of light oil at a time when supply of medium and heavier barrels are relatively tight. The dense crudes are much more hard to refine and tend to contain significant quantities of sulfur and other impurities that are costly to remove. This would help the oil-rich, but cash-poor, country dilute its extra heavy oil for export around the world.

"We are no longer going to be inward-looking and focused only on monetizing the kingdom's resources", he said, noting that his country would focus efforts on creating what he described as "global gas business". Venezuela's output is already at the lowest in decades as a spiraling economic crisis takes its toll on oil infrastructure.

Oil prices inched up on Thursday, buoyed by hopes that potential progress in the latest Sino-U.S. tariff talks would improve the global economic outlook. "In quality terms, it is more complicated". WTI is also better bid at $53.65 per barrel.

US bank Morgan Stanley said the surge in USA crude oil production, which tends to be light in quality and which rose by more than 2 million barrels per day (bpd) past year to a record 11.9 million bpd, had resulted in overproduction of gasoline.

Meanwhile, OPEC+ production cuts could erase the supply surplus in the near future.

OPEC is partnering with 10 non-member nations, including Russian Federation, to keep 1.2 million bpd off the market.

Crude oil may slide in the coming months as energy agencies continue to forecast a crude market swamped with supply at a time when demand has wavered.

The Organization of the Petroleum Exporting Countries (OPEC), which Saudi Arabia de-facto leads as the world's top crude oil exporter, said on Tuesday that it had cut its output by nearly 800,000 bpd in January to 30.81 million bpd.

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