Senior U.S. officials said on Thursday that the country’s attempts to drive Iranian oil exports down to zero were coming against the backdrop of a sufficiently well supplied global market to avoid price disruptions.
Brian Hook, U.S. Special Representative for Iran and Senior Policy Advisor to the Secretary of State stated this while speaking in a call with reporters.
Hook said, “There’s roughly a million barrels per day (bpd) of Iranian crude (exports) left, and there is plenty of supply in the market to ease that transition and maintain stable prices.”
The comments came three days after the United States demanded importers halt oil purchases from Tehran from May – or face punitive action.
Despite the suggestion of plentiful supply, the tightening of sanctions pushed global oil price benchmarks Brent and West Texas Intermediate (WTI) to their highest levels this year. The Middle East benchmark Dubai even jumped to its highest in more than five years.
“The price situation is well in hand,” said Assistant Secretary of State for Energy Resources Frank Fannon, speaking during the same call.
“Now is the right time to go to zero” Iranian oil exports, Fannon said, adding the market was “well supplied”.
Meanwhile, U.S. President Donald Trump has expressed confidence that Saudi Arabia and the United Arab Emirates would compensate for the shortfall in the oil market.
Crude oil production (C-OUT-T-EIA) is also soaring in the United States, reaching a record 12.2 million bpd this year.
The United States re-imposed sanctions against Iran’s oil exports last November, but initially allowed the eight biggest buyers of Iranian oil limited imports for another half-year.
Iran’s biggest oil buyers are China, India, South Korea, Japan and Turkey.
China is the biggest buyer, and Beijing has criticized the move to re-impose sanctions.
Hook said during the call that he was confident China would be able to find alternative supplies to Iran.
He said that there had yet to be an announcement from Washington on whether China could continue to export oil produced from assets it owns in Iran.
Another country relying heavily on Iranian supply is close U.S. ally South Korea, where petrochemical facilities use Iranian condensate, a super-light form of crude oil.
China is the biggest buyer, and Beijing has criticized the move to re-impose sanctions.
Hook said during the call he was confident China would be able to find alternative supplies to Iran.
He said that there had yet to be an announcement from Washington on whether China could continue to export oil produced from assets it owns in Iran.
Fannon said that the U.S. government was working closely with South Korea to ensure supply for its petrochemical facilities.
