Published: Sun, May 05, 2019
Money | By Ethel Goodwin

BP CEO: Trump Is The Wild Card In Oil Markets

BP CEO: Trump Is The Wild Card In Oil Markets

Still, there is general agreement that crude shipments have dropped from at least 2.5 million bpd in April 2018, the month before President Donald Trump withdrew the United States from the nuclear deal with Iran.

The US had told India and other countries to cut oil imports from the Gulf nation to "zero" by November 4 or face sanctions.

The six-month waiver granted to India and others ends on Thursday, May 2.

Saudi Arabia, a member of the OPEC cartel, is the world's top crude exporters.

"Clearly the re-imposition of sanctions and the removal of the waivers will have additional negative impact on the Iranian economy both in terms of growth and in terms of inflation, where inflation could reach 40 percent or even more this year", Jihad Azour, IMF Middle East and Central Asia director, said on April 29, according to Reuters. Experts, however, are of the view that the ruling dispensation may halt the fuel hike till May 19, when the final phase of polls are to be held, and allow the price surge subsequently.

Last month, Secretary of State Mike Pompeo announced that the USA will no longer grant any exemption beyond the deadline. Currently, there's a tug-of-war between USA and OPEC with the former looking to fast-track the approval of the "The No Oil Producing and Exporting Cartels Act 2019" (Nopec) bill that will allow the prosecute OPEC for fixing oil prices.

Among the Asian companies reviewing their dealings with Iran are banks, oil companies and tech giants including Huawei, Lenovo, LG, and Samsung.

"No one is going to give charity to India in the oil market". Turkey and China have objected to unilateral United States sanctions on Iranian oil exports, warning that it may disturb the regional equilibrium.

NORTHAM: Burkhard says there's a scramble now for oil purchasers in China and elsewhere to find alternative barrels in the market.

Saudi Arabia has signaled that it is determined to do whatever it takes to rebalance the market.

However, Tamas Varga, analyst at PVM Oil Associates, pointed out that the seemingly unstoppable rise of American producers could coax OPEC into action: "OPEC is like a tea bag; it works best in hot water.the USA oil market might just be providing the producer group with the ideal excuse to extend the production agreement for at least another six months".

The Obama administration, which had imposed sanctions on Iran in 2012 to thwart its nuclear ambitions, kept its waivers in place through the duration of its pressure campaign. It said the crew were 24 Iranians and two Bangladeshis.

The swelling American stockpiles are limiting oil's upside as the market prepares for less Iranian barrels after the end of United States waivers allowing some countries to keep buying. But the timing had not been right until now.

Supplies from the US jumped more than fourfold to 6.4 mt in the 2018-19 fiscal year. "We think this is the right time".

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