Oil hits 2019 high as US tightens squeeze on Iran

Oil hits 2019 high as US tightens squeeze on Iran

The US will no longer waive sanctions on countries that import Iranian oil, the White House announced today, in an attempt to "bring Iran's oil exports to zero".

Analysts said they expected the Trump administration to push OPEC and its de-facto leader Saudi Arabia to stop withholding supply to calm market fears of oil shortages.

"This decision is meant to bring Iran's oil exports to zero, denying the regime its principal source of revenue", said a statement from the White House. Brent crude futures rose by as much as 3.3 percent to $74.31 a barrel, the highest since November 1, before easing back to $73.87 by 9:15am GMT. Twenty-three of its importing countries have dropped their purchases to zero, and of the eight granted waivers in November, three are down to zero.

Iran supplied 18.4 million tonnes of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal).

Indian refiners have not yet placed orders to lift Iranian oil in May, pending clarity on whether Washington will extend the sanctions waiver. However, sources say that any country still importing oil from Iran will be subject to USA sanctions beginning May 2.

Trump made the decision as part of the administration's "maximum pressure" campaign on Iran that aims to eliminate all of its revenue from oil exports, which the U.S. says funds destabilizing activity throughout the Middle East and beyond.

Turkey did not support USA sanctions policy on Iran and did not think it would yield the desired result, Kalin told reporters in Washington.

More news: Three more Oswestry people arrested in Extinction Rebellion climate protests

"Should Iran's sanction waivers indeed be lifted, that could boost oil prices towards the $80 per barrel mark", said Han Tan, analyst at futures brokerage FXTM.

India, Iran's biggest oil client after China, has nearly halved its Iran oil purchase since November. China, which relies on imports for about half of its oil, could present the toughest diplomatic challenge for the U.S. in trying to enforce its sanctions.

India and four other remain continue to buy.

South Korea, a close USA ally, is a major buyer of Iranian condensate, an ultra-light form of crude oil that its refining industry relies on to produce petrochemicals.

Pompeo said the USA had gained assurances from oil producers - namely Saudi Arabia and the UAE - to ensure a sufficient supply to minimise impact on pricing.

In the USA, working oil rigs fell by eight last week to 825 as explorers reduced activity in American fields for the first time in April amid investor demand for spending discipline.

A Chinese Foreign Ministry representative did not say whether China would abide by the sanctions.

Related Articles