Prices drop after Iran sanction carve-outs

Crude oil prices briefly dipped into a bear market after President Donald Trump carved out some countries from US-imposed sanctions on Iran.

The price of West Texas Intermediate crude reached a low of $61.31 a barrel Tuesday. That was down about 20 percent from Oct. 3 when oil was trading at $76.41 per barrel at the market close.

Trump re-imposed sanctions on Iran Monday, and in the lead-up to the announcement, analysts feared global oil prices could spike.

But Trump carved out exemptions for China, Japan, South Korea, India and Taiwan in Asia, as well as Greece, Italy and Turkey in Europe.

The sanctions aim to cut Iran’s oil industry off from international sales. The penalties also cover hundreds of Iranian and Iran-linked individuals, entities and aircraft. Among those are 50 Iranian banks and subsidiaries, and more than 200 people and ships.

However, scattered among the list are surprising entries, like the crude oil tanker Sanchi. That vessel collided with a bulk freighter and caught fire off China’s east coast in January, killing all 32 sailors aboard.

Another entry was Iran’s Tat Bank, which closed in 2012.

Foreign Minister Mohammed Javad Zarif took to Twitter to mock some of the targets of the sanctions, describing it as a “desperate” psychological ploy.

“The US designated a bank that was closed six years ago, and a ship that sank in a widely televised saga,” he wrote, ending the tweet with “(hashtag) USisIsolated.”

But for the first time, the United States targeted Iran Air. It also sanctioned the state carrier’s mothballed fleet of Boeing 747s, which were manufactured in the 1970s.

It also appeared that the US, in another first, was directly sanctioning the Atomic Energy Organization of Iran, the government agency that oversees Iran’s nuclear program. Prior sanctions targeted specific subsidiaries of the organization. /