Saudi ready to raise oil supply after United States pullout from Iran deal

Lloyd Doyle
May 16, 2018

This assumes that waivers are provided like they were last time sanctions were imposed. "It could mean a more volatile Middle East, absolutely", he said.

"Given the unilateral move by the United States, much of the movement on oil prices had been factored in", said Stephen Innes, head of Asia-Pacific trade at OANDA.

With apologies to Zarif, threatening Iran's regime has worked in the past and may be working again now.

President Donald Trump's decision to withdraw from the Iran nuclear deal and re-impose sanctions means companies worldwide must stop doing business with the country or run afoul of the USA government, which can impose fines or other punishment.

Europe now has a major role in determining the fate of the Iran deal.

Rouhani, who lacks real political power, of course could be overruled.

Although Israel has never acknowledged it, its Mossad spy agency is widely believed to be behind the assassinations of at least five Iranian nuclear scientists in the years preceding the 2015 negotiations.

Shares of major companies doing business in Iran were not unduly hurt by Trump's decision, which had been expected.

This may seem counterintuitive.

Adam Smith, a Washington, D.C. -based lawyer with Gibson Dunn and former Treasury official, agreed that if sanctions are imposed then companies will essentially be forced to choose between the US and Iranian markets. "If at the time of the imposition of sanctions, we had less than a couple of hundred centrifuges, now we have about 20,000".

"While the tax cuts have lifted take-home pay for the vast majority of workers", Morgan Stanley chief US economist Ellen Zentner wrote to clients, "rising gasoline prices are eating into that benefit".

But this is only half the story.

Major companies, particularly in Europe, could see billions of dollars in commercial deals canceled because of the US decision to reinstall sanctions on Iran, though the ultimate impact remains unclear due to the possibility of renegotiations and exemptions, experts say.

Mr Trump remained unconvinced that the Iran agreement was anything but a "bad deal". In every respect, the imposition of sanctions on Iran would be a special situation, too. Since 2014, Caribbean economies enjoyed a respite from high oil prices that averaged US$100 a barrel over the previous 6 years, pushing up the cost-of-living and aversely affecting the region's capacity to compete globally, including in tourism.

Iran has also historically responded to explicit and implied military threats.

And he says that "no action taken by the regime has been more risky than its pursuit of nuclear weapons and the means of delivering them". Why did Tehran stop that year?

National security adviser John Bolton arrives for a joint news conference between U.S. President Donald Trump and Germany's Chancellor Angela Merkel in the East Room of the White House in Washington, U.S., April 27, 2018.

The inverse is also true. But calling on the country to dismantle its production facilities or relinquish its weapons will require a far more expansive inspections regimen to verify than in Iran. After Iran agreed in 2015 to the nuclear agreement, the commander of its Quds Force, Qassem Suleimani, traveled to Moscow and arranged for Russian Federation to provide air support for Iranian-backed militias fighting for the dictatorship in Syria.

The Sunni-ruled kingdom, which is fighting Shiite rebels known as Houthis in Yemen, accuses Iran of supplying the Houthis with ballistic missiles that have targeted the kingdom, including the capital, Riyadh.

USA drillers added 10 oil rigs this week, the sixth consecutively weekly addition, bringing the total rig count to 844, the highest level since March 2015, General Electric Co's Baker Hughes energy services firm said. In case the point was missed, the sailors were videotaped on their knees with their hands clasped behind their heads. "That is why Iran came to the table".

The U.S. exit from the Iranian nuclear deal, the unprecedented exchange of rocket attacks between Iranian and Israeli forces and the general belief among the U.S., Saudi Arabia and Israel that Iran's regional expansion needs to be stopped all argue for a continued rise in the price of crude.

France's finance minister says European countries should push back harder against the Trump administration over the Iran nuclear deal and not act as "vassals" to the U.S. As Rubin told me, "I don't know if the Iranians know what they are going to do yet".

"What the full impact on Iranian flows will be is still hard to estimate", said Petromatrix strategist Olivier Jakob.

Other reports by Iphone Fresh

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