Reimposing Iran oil sanctions may be difficult for US
Tehran, Reimposing sanctions aimed at Iran’s crude oil exports could prove harder than what some members of the Trump administration apparently believe, speakers suggested at a July 18 Atlantic Council discussion.
The rest of the world is not with us now, observed Brian O’Toole, an Atlantic Council nonresident senior fellow who previously worked 13 years in the federal government, including as a senior advisor in the Department of the Treasury’s Office of Foreign Assets Control, vestnikkavkaza.net reported.
O’Toole said European governments were unhappy when the US withdrew in May from the Iran nuclear arms control agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA). But the most consternation is with outliers like Turkey and India, which import a lot of Iranian oil, he said.
I don’t know if there are going to be waivers. The first negotiating team has arrived in India. But this administration has some breathing room because crude oil prices aren’t $100 per barrel, said Amos J. Hochstein, a senior vice president for marketing at Tellurian Inc. who previously was US special envoy for energy affairs and led the US Department of State’s Bureau of Energy Resources.
Several European governments have announced they won’t support companies based in their countries that try to avoid sanctions, Hochstein said. The biggest difference from 2012-15 is there at least was a process then. Now, some countries are wondering where this will end, he said.
Sara Vakhshouri, founder and president of SVP International who formerly worked in public and private sectors of Iran’s oil industry, agreed that an uncertain expiration date is troublesome, while lower oil prices currently could become a problem if they start to rise quickly.
Russia may have impact
Anna Borschevskaya, the Ira Weiner Fellow at the Washington Institute for Near East Policy who focuses on Russia’s policies in the Middle East, said the country’s relationship with Iran has been complicated, but the two governments could find common ground in opposing US sanctions once they are reimposed. Russia already has improved its relations with Iran, Borschevskaya told the group.
Given its foreign policy stance toward the US, this could grow if it believes it would undermine the US position. Russia is taking a long-term view. It sees several obstacles, which it is determined to overcome.
Robin Mills, chief executive of Qamar Energy, who spoke via a video hookup from the United Arab Emirates, said, The response of other regional countries will matter. Their key role will be to control production and exports, which they do relatively well.
Other members in the Organization of Petroleum Exporting Countries are moving in as Venezuela’s production continues to drop, he noted.
Turkey could present problems, some speakers suggested.
It would be very difficult for it to cut off supplies from Iran. The Turks have said they would not comply with sanctions, and they intend to take as much oil from Iran as possible, Mills said.
Hochstein added, There are serious infrastructure problems in Turkey. You could flood Istanbul with Russian gas, but that doesn’t mean it could go to where it’s needed to satisfy winter heating demand.
O’Toole added, The whole US relationship with Turkey could deteriorate with Turkey, regardless of whether [President Donald] Trump is fist-bumping [Turkish President Recep Tayyip] Ardogan. That could bring condensates and other streams to the table.
The question remains whether new sanctions will succeed, Hochstein said.
Iran is not a passive player. Taking a couple of actions in the Strait of Hormuz could cause some traders to react, he said.
The minute risk premiums are imposed, prices will go up and neighboring countries will be affected.
Vakhshouri said, If something happens somewhere and 1 mbd is suddenly off the market, who’s going to comply with US sanctions? The market doesn’t have that big a buffer. Spare capacity is much different from actual production. How much would Saudi Arabia be willing to provide, and for how long?
O’Toole noted, China already has several trade issues with the US, so it probably wouldn’t worry much about complying with US sanctions on Iranian oil.
Source: Iran Daily