US plans to maintain maximum pressure on Iranian oil exports
The US will press on with its campaign of maximum pressure on Iran’s oil exports with the aim to squeeze the country’s revenues, a senior American government official said.
Since walking away from the 2015 nuclear deal, the US has tried to reduce Iran’s oil exports to zero. The administration imposed sanctions on Iran in November last year, restricting its sale of oil and condensate. The US increased pressure on Tehran this May, cancelling waivers that were granted to eight of Iran’s significant oil buyers including India, China, Turkey and Japan, among others.
“We’ve been able to advance a maximum pressure campaign to take significant barrels off the global markets without any harmful impact to the global economy.
“It’s an achievement that no one thought was possible. It was never done before,” Francis Fannon, assistant secretary for the Bureau of Energy Resources at the US State Department, said yesterday.
The US has restricted about 80 per cent of Iran’s oil supply from entering the global market, but Tehran has still sold about $500 million (Dh1.83 billion) worth of crude a month, shipping data and calculations by Reuters show. Consultancy FGE estimates Iran is still shipping about 400,000 to 500,000 barrels a day.
Washington will continue to expand its campaign to include a broader suite of refined products under sanctions to reduce Iran’s revenue and stop it from engaging in destabilising activities across the region, Mr Fannon said on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference.
“We are going after a product that generates revenue that contributes to their ability to fund terrorism and proxy wars. That is the linkage,” Mr Fannon said.
More than two million bpd of Iranian crude and condensate were taken off the market under the US sanctions, which led a number of countries such as India to look for alternative supply sources.
The Indian Oil Corporation, wants to diversify its sources of oil procurement and is planning to import supplies from Russia and other countries, its chairman said.
“We have been keeping a lot of flexibility in our overall system, so that we have diversified sources in case of any restrictions so that we have options available,” Sanjiv Singh said in Abu Dhabi.
US production, currently the world’s largest, will be vital to ensuring global energy security, Mr Fannon said. The US is on track to reach 13 million bpd by year-end, he said.
“US energy abundance offers countries new opportunities to ensure and secure the energy that they need.”
More than two million bpd of Iranian crude and condensate were taken off the market under the US sanctions
On Sunday, Iran’s President Hassan Rouhani said the country had discovered a new oilfield, containing 53 billion barrels. Mr Fannon said under present conditions, the find would be of little use.
“Until Iran is able to curtail its malign behaviour and assuming that those reserves are proven true, again, who knows? I would argue under the current conditions, those are the world’s biggest stranded asset,” he said.