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US throttles Iranian oil flows to top buyers who vowed resistance

Iran will keep selling oil in spite of an expected resumption of US sanctions on the country's crude shipments, said Rouhani

Serene Cheong | Bloomberg  |  Singapore 

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FILE PHOTO: A seagull flies in front of an oil platform in the Bouri oilfield some 70 nautical miles north of the coast of Libya | Photo: Reuters

The world’s top are discovering that US sanctions on Iran will squeeze their trade flows whether they agree with America or not.

It was only about three months ago that India’s Foreign Minister Sushma Swaraj, said that the country won’t adhere to unilateral restrictions and will continue buying Iranian crude. China also made similar comments and was said to have rejected an American request to cut imports. Japan and South Korea have held talks with the US aimed at securing exemptions.

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Yet for all the pushback and negotiations, an emerging pattern shows US sanctions are succeeding in throttling Iran’s sales to its customers even before the measures take effect in early November. While the US initially wanted a complete halt in purchases, traders are now concerned that even a revised aim for only cuts would take out enough supply to create a market deficit — which other producers may struggle to fill.

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“All of Iran’s oil customers are affected by increasing US pressure to halt purchases, even as they request for concessions to cope with the consequences,” said Den Syahril, a senior analyst at industry consultant FGE. “We expect India and especially China to maintain some degree of imports, while buyers in Japan and Korea who’ve cut imports considerably will continue to aggressively seek waivers up till the last minute.”

Will exert every effort to export oil: Rouhani

Iran will keep selling oil in spite of an expected resumption of US sanctions on the country’s crude shipments, President Hassan Rouhani said. The Islamic Republic is “facing an economic and psychological war, and oil, gas and petrochemicals are in the front line,” Rouhani said in a speech on Tuesday.

“We will make every effort to continue to produce and export oil, though there may be some ups and downs.” Iran’s crude output declined 6.4 per cent to 3.5 million barrels a day last month, the biggest drop among its peers in the OPEC, data showed.


@2018Bloomberg

First Published: Tue, September 04 2018. 23:53 IST
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