Last week, several world powers convened in Vienna, Austria to revive the 2015 Iran nuclear deal. Senior officials from the governments of Iran, United States, France, United Kingdom, Germany, Russia, China, and the European Union aim to determine the next steps the United States and Iran need to take to get back into compliance. The United States has not been in direct talks with Iran but is relaying messages mainly through European members in attendance. Read More
The United States has completed the sale of over one million barrels of gasoline that were seized from four Iranian vessels last August. The fuel seized came from Iran while being transported to Venezuela, two countries sanctioned by the United States. In addition, the Biden Administration is also looking to detain another tanker believed to have shipped Iranian oil to a foreign customer. Sanctions on Iranian oil exports occurred in 2018 after the Trump Administration abandoned the Iranian nuclear agreement of 2015 due to Iran continuing to develop their nuclear program.
Venezuela has been suffering from a fuel shortage due to sanctions imposed by the U.S government. Iran and Venezuela are targets of United States sanctions and therefore Iran has stated its willingness to aid Venezuela as a fellow target of U.S sanctions. In August, the United States seized the cargo of four ships carrying fuel from Iran to Venezuela. Throughout this year, five Iranian vessels were set to aid in Venezuela’s shortage and earlier this year, only one of the five made it to Venezuela with the much-needed cargo. The other four never made it and the cargo of these vessels was seized by the U.S Administration, the cargo totaled 1.116 million barrels of petroleum.
Last week, Iraq announced that they are holding a fifth bidding round for exploration and development of natural gas fields in the province of Diyala. Located in eastern Iraq, the fields of Diyala are expected to produce more than 750 million cubic feet of natural gas within the next three years. This latest round of bidding for the country’s underdeveloped fields comes at a time where the United States has pressured the country to reduce its dependence on gas imports from Iran.
President Trump recently threatened to tax, nearly $300 billion dollars of Chinese products, by 10%. The already volatile oil market, seems to have room for some extra volatility. The volatility would largely cycle around China’s response to the U.S. tariffs. If China responds by purchasing oil from Iran, analysts speculate crude could rapidly approach $30 per barrel. Trump could impose the sanctions on the Chinese imports as soon as September 1st. Trump also threatened that he could raise the tariff, if no progress has been made towards a trade deal.
The latest episode from Iran revolves around an Iranian drone that was destroyed by a U.S. Navy ship in the Strait of Hormuz. According to the U.S. Navy, the drone had flown within 1,000 yards of the USS Boxer and had ignored “multiple calls to stand down.” The end result, the drone was immediately obliterated. Iranian officials claim they have no record of losing a drone. This episode follows another report earlier in the week when Iran said it seized a foreign tanker in the Gulf.
According to reports, Iran is quickly going to breach the Uranium-stockpile limit set by the current nuclear deal. President Hassan Rouhani of Iran has already warned that a new deal needed to be in action by Sunday June 7, 2019 or the Islamic Republic will increase enrichment of Uranium. Globally, there is much concern with the growth rate of Iran’s uranium cache, because they are just a step away from weapon-grade levels of uranium.
Early this morning the U.S. navy responded to an attack on two burning tankers after reports came that there was an attack in the Gulf of Oman. Off the coast in Iran, the USS Bainbridge was dispatched after the vessels suffered severe damage.
Tensions in the Middle East rose again over the weekend after reports indicated that four oil vessels were “attacked” or “sabotaged” at the mouth of the Persian Gulf near Fujairah Emirate, just outside of the Strait of Hormuz. The United Arab Amirates (UAE) stated that the damaged ships were two crude oil tankers owned by Saudi Arabian shipping firm Bahri, one fuel bunker barge flying a UAE flag and Norwegian oil products tanker owned by Thome Ship management. These reports are still largely unconfirmed, but come as no surprise given the recent rhetoric and geopolitical tensions facing the region.
Global oil prices shot up quickly this week following reports that the Trump administration has decided to let Iranian oil sanctions exemptions expire at the end of the month. By ending sanctions exemptions, the administration has accelerated its goal of forcing Iran’s oil exports to zero. At a Monday press conference, Secretary of State Mike Pompeo clearly laid out the purpose of ending the waivers by stating “We are going to zero. How long we remain there, at zero, depends solely on the Islamic Republic of Iran’s senior leaders. We’ve made our demands very clear to the ayatollah and his cronies.”