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although many European refiners, as well as buyers in Asia, are already winding down Iranian oil purchases.
9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Iran’s OPEC governor on July 31 scoffed at US President Donald Trump’s attempt at keeping up world oil production to curb petrol prices at the pump while at the same time attempting to shut Iranian oil out of export markets with the use of sanctions. Hossein Kazempour Ardebili’s comments to Reuters came as a survey by the news agency showed OPEC production rose by just 70,000 barrels per day in July. Saudi output increased but that was offset by a decline in Iranian supply due to the US campaign to persuade countries around the world not to buy crude from Iran.
“It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran,” Ardebili was quoted as saying.
“Now they and Russia sell more oil and more expensively. Not even from their incremental production but their stocks.”
He said oil prices, which Trump has been pressuring the Organization of the Petroleum Exporting Countries to bring down by raising output, will rise unless the US grants waivers to buyers of Iranian crude.
“They are also calling for the use of the US SPR [Strategic Petroleum Reserve]. This will also mean higher prices. US waivers to our clients if they come is due to the failure of bluffers [Saudi and other producers] and, if not given, will again push the prices higher,” he was further quoted as saying, adding: “So they hanged him [Trump] on the wall. Now they want to have a mega OPEC, congratulations to President Trump, Russia and Saudi Arabia.” The US is attempting to resist requests for sanctions waivers on imports of Iranian oil as it pursues a campaign to cripple Iran’s economy to the point where Tehran will be forced to renegotiate its role in Middle East affairs. Its oil sanctions are due to take effect on November 4.
Crude oil prices could skyrocket towards $250 a barrel if Iran follows through on a threat to close the Straight of Hormuz on the edge of the Persian Gulf in retaliation to the US threat to blocks its oil exports, RT reported on July 11. Russian trader, Artem Avinov said that if the straight was blocked, the surge in oil prices would surpass all other crises and hit the $250 mark. Closing the straights would in effect remove some of 17mn barrels a day from the international market and could provoke a war.
Like the Bosphorus straights at the entrance to the Black Sea, the pinch point the Straight of Hormuz represent in the Persian gulf are so important as closing them effectively cuts the United Arab Emirates and Iraq off from access to international waters as well as the port facilities on the Saudi eastern seaboard. The strangle hold Iran has over these important transport routes is part of the US objection to the regime in Tehran.
However, the expert said closing the Straight of Hormuz was a worst-case scenario and instead said Iran would act in different ways to protect its
37 IRAN Country Report August 2018 www.intellinews.com