In the Trump administration's telling, its decision to cut off Iran's oil exports in just over a week will have little impact on crude prices. There's enough supply to meet global demand, officials say, and the administration's Middle East allies will ride to the rescue if the world does find itself short of fuel.Analysts say President Donald Trump's hardline approach injects new risks into a fragile market besieged by instability in key oil-producing nations.
The move aims to shrink Iran's oil shipments from roughly 1 million barrels per day to zero, though analysts expect some countries to defy the ultimatum. That suggests the OPEC members will soon hike production, reversing output cuts they implemented in January. OPEC and its oil market allies, including Russia, have been keeping about 1.2 million bpd off the market following a collapse in oil prices last year.
"I do think they'll come through, but they're not going to be as enthusiastic this time around as they were, I think, in November," said John Kilduff, founding partner at energy hedge fund Again Capital. However, the U.S. is mostly producing light sweet oil, and it's the medium sour crude grades used in U.S. Gulf Coast refineries and throughout Asia that's in short supply. Blocking Iranian crude exports will only exacerbate the situation because Iran is a major source of medium sour crude.
"We will be closer to balance, but that balance will be more precarious given that lack of spare capacity," Smith said."We're already seeing those heavy sour barrels drop off the market from Venezuela. We're now seeing it from Iran."
it looks like Trump's crackdown on Iran will be supported by other oil producers and the market will settle out. Are you working on more FakeNews ?
As intended