US to sanction Iranian-oil-purchasing countries and Saudi Arabia to offset the shortage

US President Donald Trump

US President Donald Trump said on Monday that Saudi Arabia and other member countries of the Organization of the Petroleum Exporting Countries (OPEC) are capable of controlling the oil market while ending exemptions that allow some countries to purchase the Iranian oil.

“Saudi Arabia and others in OPEC will more than make up the Oil Flow difference in our now Full Sanctions on Iranian Oil. Iran is being given VERY BAD advice by John Kery and people who helped him lead the U.S. into the very bad Iran Nuclear Deal. Big violation of Logan Act?” Trump tweeted via his official Tweeter account today.

The US president renewed the attack on former US Secretary of State John Kerry and those who helped him lead the United States to a nuclear deal with Iran, which he described as “very bad”, referring to the law that bans citizens who are not authorized to negotiate with foreign governments with a dispute with the United States of America.

Trump administration to sanction Iranian-oil-purchasing countries

The Trump administration said on Monday that the United States, Saudi Arabia, and the United Arab Emirates are committed to securing a balance in the global oil market. The Trump administration also confirmed that US Donald Trump decided not to renew Iran’s oil sanctions exemptions when it is due in next May.

It is noted that Trump administration imposed economic sanctions on Tehran during two phases (August and November 2018), including several sectors; the oil sector, following the unilateral withdrawal of Washington from the nuclear agreement, known as P5+1, concluded in 2015 between Iran and six major countries, namely: United States, Britain, France, Russia, China, along with Germany.

Saudi Arabia to offset any possible shortage in the oil market

On its side, Saudi Arabia has already confirmed its readiness to increase oil production to offset the potential loss if the United States ends Iran’s sanctions exemptions, but not before it has an impact on the market.

Oil prices are quickly affected Oil prices jumped on Monday after the United States appeared to be announcing that all Iranian oil buyers would be obliged to end their imports or be subject to sanctions. Brent crude rose by 3.3%, reaching $74.31 a barrel, its highest level since November 1, before falling to $73.63 a barrel with a rise of 2.3% above the last close. US WTI crude also rose by 2.9%, reaching $65.87 a barrel, their highest level since Oct. 31. The price was $65.50 a barrel with an increase of 2.3% above the previous settlement.