The move threatens to squeeze supplies further in a market that’s already facing supply disruptions from Venezuela to Libya and Nigeria
International News: Six months after the U.S. rocked oil markets by letting Iranian exports continue, its decision to end sanctions waivers that allowed shipments is also set to reverberate across the globe. The U.S. is said to announce Monday morning in Washington that it won’t renew exemptions from its sanctions to buyers of Iranian crude after they expire on May 2. It marks a change in direction from November last year, when the Donald Trump administration granted waivers to eight importers as it sought to temper fuel prices ahead of American mid-term elections.
The move threatens to squeeze supplies further in a market that’s already facing supply disruptions from Venezuela to Libya and Nigeria, and extend this year’s rally in global benchmark Brent crude above $70 a barrel. Prices are still below the four-year highs of over $86 they hit in October before the U.S. issued its waivers. Here are some of the potential implications of the Trump administration’s latest decision, which is aimed at piling economic pressure on Iran over the Persian Gulf state’s nuclear program by cutting off a key source of the OPEC member’s revenue.
Fate of OPEC+ Deal
The U.S. government will also announce that it got commitments from suppliers such as Saudi Arabia and the United Arab Emirates to offset the loss of Iranian crude, according to people with knowledge of the matter.
That could jeopardize the output deal between the Organization of Petroleum Exporting Countries and its allies, which have been curbing supplies since the start of the year to avert a glut. Russia, one of the partners in the pact, has already signaled that the cuts may not need to be extended. A decision is expected when the producer group known as OPEC+ meets in June.
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