Talks of Iranian Nuclear Deal

Today the Biden Administration discussed easing sanctions against Iran which would include oil as a key element. After a five day talk in Vienna this week, leaders returned home feeling optimistic after discussions that President Biden wants to return to the 2015 nuclear agreement that the U.S. withdrew from during the Trump administration in 2018.
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Return To The Deal?

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

Confiscated

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.

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Venezuela Turns to Iran to Aid in National Fuel Shortage

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.

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Iraq Seeks to Reduce Iranian Dependence on Energy

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.

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China Crude Crunch

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.

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Middle East Market Momentum?

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. 

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Waive Goodbye to Sanctions Exemptions

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.”

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Floating Liabilities

The United States sanctions against Iran’s oil exports entered into full force last week as the United States attempts to cripple Iran’s oil-dependent economy and suppress their nuclear desires.  Although Washington has vowed to halt all purchases of crude from Iran, it recently supplied eight countries with waivers to continue imports without penalty for the next 180 days.  While President Trump views this as a way to stabilize any fear of global price spikes, Iranian President Hassan Rouhani believes the United States had no choice but to grant the waivers and Iran has publicly stated they will continue to export as much oil as needed.  However, one thing to be cognizant of is, how will Iran ship their product?

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Breaking the Price Surge

Today, oil prices dropped to $83 a barrel after the United States said it is actively considering waivers on the oil sanctions against Iran, potentially easing the current strain on supply and allowing Iranian oil exports to keep flowing.

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