OPEC Will Rebalance Nervous Oil Market

OPEC Will Rebalance Nervous Oil MarketOPEC Will Rebalance Nervous Oil Market

The United States will continue its efforts to decrease Iran’s sales of crude oil, the Treasury Department said on Tuesday following the announcement of the unilateral US withdrawal from the nuclear deal it signed with Iran along with five world powers.

"The sanctions lifted under section 1245(d) of the NDAA [National Defense Authorization Act] will be reimposed following a 180-day wind-down period, and the United States will again pursue efforts to reduce Iran’s sales of crude oil under the NDAA during and following that period," the Treasury said, Sputnik reported.

"The Organization of Petroleum Exporting Countries will continue making efforts to rebalance the oil market and bring investment back into the oil industry," UAE Energy and Industry Minister Suhail Mazroui, who holds OPEC's presidency this year, said on Tuesday, following the US announcement.

"OPEC is a non-political organization. Our goal is to ensure the stability of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry. Working collaboratively with our partners, our joint efforts to rebalance the oil market and bring investment back into our industry are progressing well. Collectively, we will continue to focus on these goals," Mazroui said on Twitter. Iran is one of the major oil producers in the world. According to OPEC, it has proven crude oil reserves of about 157 billion barrels.

While oil-related sanctions will not kick in for six months, the oil market has been nervous about losing part of the output of one of OPEC’s biggest oil exporters.

“If the United States puts sanctions on Iranian oil exports, it will not be as effective as back in 2012, simply because there is not an agreement between the major powers—the US and the EU—over implementing sanctions on Iran because of its nuclear program,” says Sara Vakhshouri, a former expert of the National Iranian Oil Company and now head of SVB Energy International, a consultancy.

At the same time, oil supplies are restricted by OPEC’s decision to cut back output and by Venezuela’s meltdown, while demand for crude is booming. 

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