Sufficient global oil supply exists outside of Iran for the US to require Iranian-crude buyers to make significant reductions as part of sanctions snapping back in November, US President Donald Trump said Monday in an expected determination.

The determination took into consideration global economic conditions, increased oil production by certain countries, global spare production capacity and availability of strategic reserves, Trump said in a memorandum to the secretaries of State, Treasury and Energy departments.

“I will continue to monitor this situation closely,” Trump said in the memo.

US sanctions against Iranian-oil buyers go back into force November 5, and the Treasury Department has instructed countries to make significant cuts to their imports in the next six months to be considered for potential sanctions relief.

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But so much is unknown about how the Trump administration will review those requests, especially at a time of rising oil prices going into the peak summer driving season in the US.

Most analysts surveyed by S&P Global Platts predict the sanctions will remove less than 500,000 b/d of oil supply from the global market by the November enforcement deadline, ranging from 100,000-200,000 b/d at the low end and up to 800,000 b/d at the high end.

Iran has boosted its oil production nearly 1 million b/d since the nuclear deal lifted Western sanctions in January 2016.

–Meghan Gordon, meghan.gordon@spglobal.com

–Edited by Derek Sands, newsdesk@spglobal.com

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