Some degree of uncertainty has been cast on the global prices of oil and gasoline because of the decision by United States President Donald Trump to pull out of the Iran nuclear deal.
The Organization of the Petroleum Exporting Countries (OPEC) nation’s crude oil exports could be reduced because of Trump’s decision to move out of the Iran deal – also known as the Joint Comprehensive Plan of Action (JCPOA), even as there is volatility in the global crude prices because of production cuts by the OPEC countries and Russia and the political instability in Venezuela. It is expected that there would be a decline in the oil exports form Iran to countries in Europe, China and some other countries some time later this year and in 2019.
Global oil prices had risen to record highs this week since late 2014 on concerns that there could be a tightening of supplies because of fresh sanctions on Iran.
The U.S. pulling out of the Iranian deal could impact the export of oil from Iran and could possibly result in geopolitical tensions in West Asia – the region that has control over one third of the global oil reserves. the United States will reimpose the “highest level of sanctions” with “additional economic penalties” on the Iranian regime, Trump has said since pulling out of the Iranian deal.
However, the shortage of oil because of potential sanctions on Iran’s oil exports has been pledged to be made up by Saudi Arabia with close coordination of the OPEC and non-OPEC producers so that there is stability ion the global oil market. the efforts by the OPEC and some non-OPEC oil producing countries at balancing the global oil market and prompting investments in the sector “are progressing well”, UAE energy minister Suhail al-Mazroui said on Tuesday.
“Our goal is to ensure the stability of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry”, he further added.
The French oil major Total has made investments worth multibillion-dollars in gas project in the country and the decision of Trump about the Iran nuclear deal would impact the company significantly.
Iran will talk to the other signatories of the deal such as those in Europe, Russia and China., said the Iranian President Hassan Rouhani following Trump’s decision. He described the U.S. action as being “unacceptable” according to the international news channel from the Middle East – Al Jazeera,
Anticipating a renewal of U.S. sanction on Iran’s oil exports, many Asian refiners have already identified and shifted to other crude exporters according to news sources. Currently, Iran exports about.5 million barrels of crude oil a day and the major export markets for that oil are China, India and some other Asian countries. however. There would not be any immediate impact on export of oil from Iran because the sanctions would be imposed – if at all, after a period of 180 days.
(Adapted from Business-Standard.com)