United States leaving of JCPOA won't affect Iran's oil, gas exports, revenue: Zanganeh

  • United States leaving of JCPOA won't affect Iran's oil, gas exports, revenue: Zanganeh

United States leaving of JCPOA won't affect Iran's oil, gas exports, revenue: Zanganeh

Crude oil prices are showing a climb in the aftermath of President Trump's announcement on the Iran nuclear deal.

The EU had essentially cut its oil imports from Iran to zero the first time around, a scenario that probably won't be repeated again since the EU supports the nuclear agreement.

The United States plans to reintroduce sanctions against Iran, which pumps about 4 percent of the world's oil, after abandoning a deal reached in late 2015 that limited Tehran's nuclear ambitions in exchange for the removal of USA and European sanctions. Iran pumps about 4 percent of the world's oil and exports about 450,000 barrels per day (bpd) of crude to Europe, according to tanker-tracking data.

Niels Christensen: Saudi Arabia said earlier this year that they would be pleased to see oil prices above $80 towards $100, and they have also been indicating that they are not going to change the re-agreement amongst the OPEC countries about production cuts, that is running until the end of the year and everybody expects that deal with Russian Federation and also other non-OPEC countries to continue into 2019, so that will also be a factor supporting the oil prices.

Many analysts expect oil prices to rise as Iran's exports fall.

Oil prices have soared by around 70% since last June. Crude topped $70 a barrel this week for the first time in almost four years. No - I am doubtful that oil prices will be sustained at this level.

Gasoline prices, which generally follow oil prices, have jumped to a national average of $2.81 a gallon, according to AAA. That's up from $2.49 a gallon a year ago, a gain of 19 percent.

Wall Street stocks rose Wednesday, with energy shares boosted by higher oil prices and banking shares advancing on expectations of increased interest rates.

But it's not clear how high prices will go. That will be determined by a range of factors, including how much Iranian crude is restricted by the sanctions and whether other major producers - such as the United States - fill the gap.

Saudi Arabia, on the other hand, could. In a statement late Tuesday, the Saudi energy ministry said was "committed to supporting the stability of oil markets".

Kuwaiti oil minister Bakhit al-Rashidi said his country will work with OPEC and non-OPEC oil producers to limit impact of any possible shortage in supplies, state news agency KUNA reported.

Market participants said there were still many unanswered questions about how the United States might impact European companies. Heightened geopolitical fears in the Middle East often raise prices.

Sputnik: And how would the market react to Iran's decision to export oil? The country, the third-biggest producer of crude within the Organization of the Petroleum Exporting Countries, exported about 2.6 million barrels per day (bpd) in April.

Just how much of Iran's growth in oil production is at risk - and when it could decline - is uncertain. But it's costing those refiners more to buy the crude oil they need to make those new gallons.

In addition, current trade tensions between China and the United States mean that Beijing is unlikely to support US action against Iran. "Iranian is not the only crude".

After sanctions were eased as part of the nuclear agreement, Iran ramped up production to about 3.8 million barrels a day.