So much for the Saudi "record production" intervention in pushing the price of oil lower: while the news did briefly send crude down, it immediately spiked following news that the US would also press allies to cut Iran oil imports to zero, effectively removing up to a million barrels from the market, and the result has been a sharp spike higher in the price of WTI, which has jumped above $70 for the first time since May 25.
The Iran announcement was expected, and followed President Trump’s warnings that European nations should scale back their trade with the Islamic Republic or face sanctions after the US withdrawal in May from the Iran nuclear deal and administration
In the Tuesday briefing, the State Department official said that while the administration wouldn’t rule out waivers or extensions to the November deadline, which was previously announced, it isn’t discussing them either.
The official, who spoke on condition of anonymity, said the U.S. was planning conversations with the governments of Turkey, India and China, all of which import Iranian oil, about finding other supplies. The official said an important part of those discussions was making sure countries aren’t “adversely affected” by cutting Iranian oil imports.
According to Bloomberg, in 2017 Iran shipped 755,000 barrels a day to European customers on average, and 1.37 million barrels a day to Asia-Pacific buyers, according to data from the Organization of Petroleum Exporting Countries.
As Bloomberg's Javier Blas shows, here is a list of Iran's top energy clients.
CHART OF THE DAY: With U.S. asking allies to cut imports of Iranian oil to ZERO by November, here who's who among Tehran energy clients -- via @EIAgov Full story here: https://t.co/pNWFJXxXxq #OOTT pic.twitter.com/dZEinH6cuC— Javier Blas (@JavierBlas2) June 26, 2018
Iran's oil minister Bijan Zanganeh said last week that the country was bracing for the loss of buyers due to U.S. new sanctions, with oil majors Total and Royal Dutch Shell among energy companies that have already stopped their purchases.
Meanwhile, should the rapid oil price increase continue, expect another angry tweet from Trump slamming OPEC in the not too distant future.