US Intensifies Pressure on Iran Oil Customers

US Intensifies Pressure on Iran Oil CustomersUS Intensifies Pressure on Iran Oil Customers

The United States intends to impose sanctions on all customers of Iranian oil, including China, the EU and Russia, Treasury Secretary Steven Mnuchin said on Thursday, signaling that the US will be working to cut off Iran’s access to the oil market.

“It is our intent to enforce sanctions on Iran-related oil against everybody, including China,” Mnuchin said in his testimony before the House Financial Services Committee, Oil Price reported.

Oil prices jumped two weeks ago, after the US said it would look to get Iranian oil exports “down to zero” when sanctions return in early November. The US also said that it may refuse to issue waivers, but later clarified that position by saying that it would “work with those countries importing Iranian crude oil to get as many of them as possible down to zero by Nov. 4.”

“We are prepared to work with countries that are reducing their imports on a case-by-case basis. We are serious about our efforts to pressure Iran to change its threatening behavior,” a State Department official said two weeks ago.

Secretary Mnuchin’s Thursday comments are the clearest sign yet that the United States plans to seek a drastic reduction of Iranian crude oil exports by imposing sanctions on those who continue to buy Tehran oil after the US sanctions return.

Earlier this week, a senior official said US State Department officials had visited Saudi Arabia to coordinate stronger pressure on Iran and discuss ways to ensure that the oil market is well-supplied after US sanctions on Iran’s oil kick in.

The tough US line on Iran’s oil exports has had analysts raise their oil price forecasts, predicting that more oil will be removed from the market at a time when global spare capacity is shrinking, as Saudi Arabia and Russia opened the taps to compensate for supply disruptions elsewhere and to cap upsides in oil prices that could destroy demand.

Last week, Morgan Stanley lifted its forecast for Brent crude by $7.50 to $85 a barrel for H2 2018, while Bank of America warned that a complete cutoff of Iran’s oil could result in oil prices jumping to more than $120 a barrel.


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