Despite EU measures, US sanctions against Iran to drive oil prices higher

The EU Commission’s announcements are not taken seriously by the European companies, which are are now refusing to go to Iran, Iranian expert tells NE.

- Advertisement -

Oil prices are likely to rise as traders worry that US sanctions against major oil producer Iran will lead to a tighter market towards the end of the year.

“Overall, there is a fear of shortage or insufficiency of supply,” International oil and energy consultant Manouchehr Takin, an Iranian based in London, told New Europe by phone on September 6. “It is on the up side. In the last two days it fell by $2 on a short-term basis. But I think overall it would recover again. By how much, would it go up to $80? I would not be surprised, but I wouldn’t like to make a guess.”

Oil prices fell on September 7 as a rise in stocks of refined petroleum products offset a sharp decline in US crude inventories to the lowest level since 2015, Reuters reported. Brent crude futures were down $0.34 cents to $76.16 a barrel. US West Texas Intermediate (WTI) crude futures slipped $0.64 cents to $67.13 per barrel, according to the news agency.

“There is a concern for the supply side that it may not be able to maintain the demand, which is supposed to grow, and overall I think it makes the price go up. But on short-term basis daily, weekly we may get a high level or low level of inventories in the United States for crude and for gasoline so these do have an impact,” Takin said. “There is still prospect of strong strength for demand for oil,” Takin said. For the next few years, demand is going to grow. China, for example, has slowed down its growth, but it’s still significant.”

On the supply side, Venezuela’s oil industry is in a very difficult situation, according to Takin, while Libya’s oil exports are up and down as there have been some improvements to the security situation, but clashes between various militia groups continue.

Turning to his own country – Iran, Takin said the re-imposition of US sanctions by US President Donald J Trump against consumers of Iranian oil would drive oil prices higher. “Iran is under the pressure of sanctions by the President of the United States,” he said, adding that the US is forcing companies not to buy Iranian oil and the US Treasury Department is limiting financial transactions related to Iran.

“Iran’s oil exports are 2.5-2.6 million barrels per day,” Takin said. “Europe wants itself wants to buy oil from Iran and hasn’t imposed sanction so Iranian exports shouldn’t fall by more than one million barrels per day and Iranian exports should be around 1.5 million barrels per day at least,” he added.

The EU is fully committed to the continued, full and effective implementation of the JCPOA, as long as Iran also respects its nuclear-related commitments, an EU spokesperson told New Europe late last month, referring to the Joint Comprehensive Plan of Action known commonly as the Iran nuclear deal or Iran deal.

“In reaction to the re-imposition of US sanctions on Iran, the EU has updated its Blocking Statute, which entered into force on August 7 to mitigate their impact on the interests of EU companies doing legitimate business in Iran,” the spokesperson said.

Takin, however, told New Europe that the Commission’s announcements are not taken seriously by the European companies, which are are now refusing to go to Iran.

“In spite of the European Commission, the European Union supporting them through these various mechanisms, many of these companies like Total have major operations in the United States and they don’t want to get entangled into fights, legal disputes in the United States despite the support of the Commission,” Takin said, adding that the US is a big market for the oil industry.

“The oil companies, service companies, they don’t want to lose that. They all want to be present in the United States. When they have to choose between Iran and the United States, unfortunately, they take a sort of more conservative side and try to balance the two and take the option to be a good boy in the books of the United States,” added Takin.

follow on twitter @energyinsider

- Advertisement -

Subscribe to our newsletter

Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

Latest

Tariff Trouble in Trump Town

President Trump has had many a cartoon about him...

Global reaction to Trump tariffs only reinforces his use of this tired and risky strategy

True to form, U.S. President Donald Trump disrupted global...

The New Face of an Old Enemy: The renewed dangers of ISIS and al-Qaeda

A dangerous cocktail of indifference and complacency enabled al-Qaeda...

EU-Central Asia Civil Society Forum enhances regional cooperation, sustainable development

Almaty, the largest city and former capital of Kazakhstan,...

Don't miss

Tariff Trouble in Trump Town

President Trump has had many a cartoon about him...

Global reaction to Trump tariffs only reinforces his use of this tired and risky strategy

True to form, U.S. President Donald Trump disrupted global...

The New Face of an Old Enemy: The renewed dangers of ISIS and al-Qaeda

A dangerous cocktail of indifference and complacency enabled al-Qaeda...

EU-Central Asia Civil Society Forum enhances regional cooperation, sustainable development

Almaty, the largest city and former capital of Kazakhstan,...

Tariff Trouble in Trump Town

President Trump has had many a cartoon about him as a child throwing toys and anything to hand out of the playpen. Now, of...

Global reaction to Trump tariffs only reinforces his use of this tired and risky strategy

True to form, U.S. President Donald Trump disrupted global markets with a three-day surge of tariff announcements, border security negotiations and ultimately a 30-day...

Donald Trump is inaugurated amidst promises of security, stability and prosperity

After storming a frigid Washington D.C. during his extended inauguration festivities on January 20, Donald J Trump, America’s 47th and 45th President, launched a...

The heat is on Trump’s fossil fuel push, climate change pushback

2024 has officially been confirmed as the warmest year on record, with global temperatures surpassing the 1.5°C threshold mentioned in the Paris Agreement, Alberto...

The Biden administration’s parting gift to Russia: Still more sanctions

Clearly working overtime to underscore the Biden administration’s desire to inflict maximum economic pain on Moscow and its coterie of Ukraine invasion supporters outside...

Undeclared “open season” on energy infrastructure in Europe

Russia is claiming it has shot down nine Ukrainian drones that tried to attack the TurkStream pipeline, which carries Russian gas to Europe through...

Righteous indignation over Maduro’s inauguration unlikely to change Venezuela’s dark reality

President Nicolas Maduro of Venezuela was sworn in on January 10 for his third six-year term. Promising that his third term would be one...

Stringent new energy sector sanctions on Russia announced

On January 10, the U.S. Government released a massive new listing of over 200 entities and individuals involved in Russia’s energy sector for Ukraine-related...