The U.S. government has announced it will not grant more waivers for Iranian oil, after restoring sanctions against this nation.
This move evidences the Trump administration’s intent to stifle Tehran’s sources of income.
“Iran is now increasingly feeling the economic isolation that our sanctions are imposing … We do want to deny the regime revenues,” Brian Hook, special U.S. representative in Iran, told the press in Abu Dhabi.
The statements took place during an industry conference in the UAE capital, Abu Dhabi.
“Eighty percent of Iran’s revenues come from oil exports,” Hook said. The official stressed that this is “(the) number one state sponsor of terrorism… We want to deny this regime the money it needs.”
Rising diplomatic tensions
The tensions between Iran and the United States have increased since May when president Trump abandoned the 2015 nuclear agreement between Tehran and the main powers. Trump severely criticized this deal, as he assured it greatly favored Iran. As a result, the country restored the sanctions against the Islamic Republic that had been lifted as part of the deal.
“We want a new and improved agreement,” Hook said, and added that, “in that process, we are denying the Iranian regime billions and billions of dollars and they are facing a liquidity crisis.”
He justified the measure saying that the Islamic Republic will not return to the negotiation table without pressure.
Iran’s refusal to renegotiate
Iran has refused to renegotiate the nuclear deal. The nation assures its ballistic missiles project is solely defensive.
Nevertheless, the program is a source of concern for Washington and its allies in the region, including Israel and Saudi Arabia.
Iran facing difficulties despite the waivers
Hook stated that Washington was pleased with China cutting its oil imports from Iran and added that he expects Iranian oil exports to reduce much more. “We are just getting started,” he assured.
Iran’s oil exports are set to sharply decrease for the third consecutive month in January. Tehran is making an enormous effort to find new buyers, in the midst of U.S. sanctions. The country is facing financial hurdles despite the fact that its traditional clients were granted temporary waivers.
Hook declined to comment on the administration’s next step after the current sanctions end in May.
Washington granted waivers to Iranian crude buyers, including China, India, Japan, and South Korea. This measure was taken after the sanctions were restored in November.
OPEC is not the enemy
The Organization of Petroleum Exporting Countries (OPEC) is not the enemy of the United States, said UAE energy minister Suhail al-Mazrouei who addressed OPEC-U.S. relations industry conference in Abu Dhabi.
The OPEC and other oil producers led by Russia agreed in December to reduce their combined crude production by 1.2 million barrels per day as of January. The measure seeks to avoid oversupply and prevent a price drop.
Mazrouei said that, in 2018, oil prices averaged $70 per barrel.
For his part, his Omani counterpart Mohammed al-Rumhi stated he expected prices to stand between $60 and $80 per barrel in 2019.
The cartel does not foresee new cuts
The production cut by 1.2 million barrels should suffice to stabilize the market, according to Mazrouei . He added that he did not anticipate that OPEC members Venezuela, Libya, and Iran, which have been granted waivers, will increase oil production in 2019. On the contrary, he assured it was more likely that they will decrease production.
Both Mazrouei and Rumhi stated that the OPEC and allies did not need to meet before April when they are determined to make a decision regarding their production policy for the rest of 2019.
“Things are going well,” Rumhi, whose country is an OPEC ally participating in the production cut agreement, said.
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