Oil market starts to react to the new ban on Iran’s oil exports

Tabnak – By the end of the temporary sanctions waivers granted to a number of Iran’s oil consumers and with the US refusing from extending the waivers, Washington’s policy of maximizing pressures on Iran takes a new turn. However, there are serious concerns around the world about the destabilizing effects of the American move.

In fact, the United States' insistence on zeroing out Iran's oil exports is starting to cause all kinds of commotion in the global market, keeping confused both experts and buyers as they look straight into what is shaping up to be a chaotic chapter for the petroleum industry.

Iranian officials and experts across the world seriously doubt that the administration of US President Donald Trump would be able to deliver on its ambitious pledge, even though Washington has announced that it will no longer extend oil waivers for Iran when they expire on May 1.

This is while China and several other major purchasers of Iranian energy already complained to the US about the new decision, calling for some sort of extension that would allow them to buy more until they can find an alternative.

In this vein, Iranian Minister of Petroleum Bijan Zangeneh says a US bid to cut Iran’s oil exports to zero is a “pious hope,” warning countries using oil as a weapon about repercussions of further volatility in the global market.

“As I have already said, the US wishes to cut Iran’s oil exports to zero but this is a pious hope. Any independent market expert knows that a surplus of capacities declared by certain countries is exaggeration and overstatement,” Zangeneh told the opening of the 24th International Oil, Gas, Refining and Petrochemical Exhibition in Tehran on Wednesday.

He said that Iran held no grudge against any countries in the region but noted that two regional states overstate their production capacities to reassure the market that Iran’s output restraint would result in no supply cuts.

Meanwhile, Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani told reporters in Doha on Wednesday that the decision to end the waivers would harm countries that rely on the supplies.

“The sanctions should not be extended because they have an adverse impact on countries benefiting from Iranian oil,” Sheikh Mohammed bin Abdulrahman Al Thani told a press conference in Doha.

There are already rumors flying around that a short extension would be announced in the coming days to let Iran's buyers put in orders for long after the waivers expire.

“Given President Trump’s unpredictable negotiating style, it remains possible that a modest waiver extension will be provided beyond early May, or that sanctions against certain buyers will not be fully enforced if imports are cut dramatically,” Paul Sheldon, chief geopolitical adviser at S&P Global Platts Analytics was quoted as saying by MarketWatch.

Oil prices have hit their highest since November in recent days after the US said all waivers for those importing Iranian oil would end this week. Washington says it is working with Saudi Arabia and the United Arab Emirates to ensure oil markets are “adequately supplied,” but traders worry about tight supplies.