Iran Aims to Keep Oil Exports Flowing Despite US Sanctions

Ivan Schwartz
July 4, 2018

The developments were preceded by US President Donald Trump tweeting about his telephone talk with Saudi King Salman bin Abdulaziz Al Saud, who allegedly agreed to Washington's proposal to increase Riyadh's daily oil production to two million barrels.

"Don't forget the one negative to the Iran deal is that you lose a lot of oil, and they got to make up for it".

"We are working to minimize disruptions to the global market, but we are confident there is sufficient global spare oil capacity", Hook said.

Investors had questions as "to whether Saudi Arabia and Russian Federation could or would really be able to ramp production quickly enough", said Rob Haworth, who helps oversee US$151 billion at U.S. Bank Wealth Management in Seattle.

Hook's comments follow a turbulent week in the oil market that started last Tuesday when another State Department official called on buyers to stop importing Iranian crude by November 4. That's led to higher prices at gasoline pumps in the U.S.as it heads toward midterm elections for Congress.

"Saudi Arabia's readiness to utilize its spare production capacity which is estimated at 2 million barrels could spell trouble for oil bulls down the road", Lukman Otunuga, research analyst at FXTM, told Arab News.

On May 8, President Donald Trump officially withdrew the USA from the UN-endorsed nuclear agreement and threatened Iran with worst sanctions.

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On Fox, Trump directed blame at the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the biggest producer. "We do not know how the market will react but prices will surely decrease".

Saudi Arabia doesn't seem to be in a rush to fulfill Trump's request for an extra 2 million barrels per day.

Iran possesses the second-largest gas reserves on the planet, after Russian Federation, and the fourth-largest oil supplies, while Saudi Arabia is the world's biggest oil exporter.

Trump was referring to OPEC's decision to raise output together with its non-OPEC allies by around 1 million barrels per day, although since then Saudi Arabia has pledged to raise production to a new record. "They don't want our farm products".

The bank said a "medium-intensity (trade) conflict would likely reduce global economic growth by at least 0.5 per cent, "before accounting for tighter financial conditions and sentiment shocks".

Mr Trump took another swing at his European allies saying they dealt unfairly with the USA over trade. Off-topic, inappropriate or insulting comments will be removed.

Other reports by GizPress

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