US Says Global Oil Surplus Aiding Its Plan to Cut Iranian Exports

Lester Mason
March 15, 2019

Iranian officials have threatened to block the Strait of Hormuz, a major oil shipping route in the Gulf, if the United States attempts to stop the Islamic Republic's oil exports. "We are in talks with them and let's see what happens, let's wait for the result", Indian Petroleum Secretary M.M. Kutty said on the sidelines of CERAWeek in Houston, Texas.

Trump "has made it very clear that we need to have a campaign of maximum economic pressure" on Iran, Hook said, "but he also doesn't want to shock oil markets, he wants to ensure a stable and well-supplied oil market". India is hopeful that the U.S. will extend the waiver from sanctions on its oil imports from Iran when the current six-month period expires in early May following Foreign Secretary Vijay Gokhale's talks with senior officials in Washington this week.

Iran's bid to buy ten new supertankers from South Korea stalled out after the United States pulled out of the nuclear deal and re-imposed sanctions, while the Greek network that previously helped Tehran buy new ships has been blacklisted.

The United States has reimposed sanctions against Iran after withdrawing from a landmark 2015 agreement under which Tehran agreed to restrictions on its nuclear program in exchange for sanctions relief.

Iran has more than 50 tankers, but needs them for both transporting oil and storing unsold stocks in its territorial waters - given its limited onshore storage capacity.

US Secretary of State Mike Pompeo has stressed Washington's commitment to swiftly bring Iranian crude oil exports to zero, saying Tehran's role in the energy market has been diminishing due to US pressure.

The US Navy's 5th Fleet is based in nearby Bahrain and over the years has had aircraft carrier groups patrol the seas off of Iran in a show of force.

Iranian officials, however, are trying to appear positive and upbeat regarding the sanctions. A third Iranian official said talks were still ongoing.

And with few buyers now willing to take all the commercial risks involved in oil sales, Iran is also having to cover the shipment of cargoes, including securing insurance in most instances, shipping sources said.

"I call on the global community to halt, by any means, Iran's attempts to bypass the sanctions via the sea", Netanyahu said.

"Banks will not engage when you mention the Iran word".

It is believed that more than 15 Iranian tankers are coming up to 20 years old.

U.S. Special Representative for Iran, Brian Hook, described Iran's tanker sector as a "floating liability" in November.

Vietnamese officials did not respond to requests for comment.

Other reports by Iphone Fresh

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