US Cannot Completely Cut Off Iran Oil Exports

The US is overwhelmingly likely to fail in its attempt to completely halt Iran's oil exports, analysts told CNBC, with President Donald Trump eager to avoid rising gasoline prices ahead of presidential elections next year.
As the first anniversary of the US withdrawal from a 2015 nuclear accord between Iran and six world powers approaches, energy market participants are waiting to see whether the Trump administration will extend sanctions waivers on eight countries importing Iranian oil.
Trump has until May 2 to decide whether to issue new waivers to eight governments—China, India, Japan, Turkey, Italy, Greece, South Korea and Taiwan—that were allowed in November to keep buying Iranian oil without facing penalties.
"The US will probably fail to reduce Iranian exports to zero, despite renewed talk from the White House about letting all oil import waivers expire in early May," analysts at Eurasia Group said in a research note published Saturday.
Given OPEC and non-OPEC production cuts and conditions in Venezuela, "the oil market probably cannot absorb the loss of 1.3 million barrels per day of Iranian crude without a significant effect on domestic gasoline prices—a red line for Trump," they added.
Last week, the Trump administration's special representative for Iran, Brian Hook, told reporters that "there are better market conditions for us to accelerate our path to zero."
Therefore, the US is "not looking to grant any waivers or exceptions to our sanctions regime," he added.
Hook's comments come at a time when the national security team appears to be split over whether to let a small group of countries carry on importing Iranian crude.
Analysts at BNP Paribas said in a research note that US officials were divided because the national security council is "leaning towards a more hawkish stance than the state department."
The state department seems to favor "a more flexible approach in achieving the US administration's goal to reduce Iran's crude exports towards zero," they added.
Despite the confusion, analysts at Eurasia Group said they expected the Trump administration to issue new waivers to the five countries currently importing Iranian crude and condensate: China, India, Turkey, South Korea, and Japan.
That means waivers would likely expire for Greece, Italy and Taiwan.