Published: Fri, May 11, 2018
IT | By Lester Massey

Saudi Arabia may fill in the gap for Iranian oil post-sanctions

Saudi Arabia may fill in the gap for Iranian oil post-sanctions

The market had largely expected that President Trump would refuse to waive the sanctions on Iran this time around, and after an earlier dip on Tuesday, oil prices jumped after the announcement that the US was walking away from the deal. Let's break down what exactly is going on here.

Professor Gillespie highlighted that the International Atomic Energy Agency (IAEA) confirmed Iran is not cheating on the deal.

It's a long story and for the full details in a convenient three minutes, check out the video explanation below.

Having poured tens of billions dollars by new weapon agreements with the US under its de-facto ruler Crown Prince Mohammed bin Salman, Saudi Arabia also expressed its joy with Trump's decision.

The release of three Americans held in North Korea gives the Trump administration a feel-good foreign policy victory - but it also highlights the bleak prospects for Americans held in Iran now that the United States has left the Iran nuclear deal.

Under the financial sanctions, European companies will have 90 to 180 days to wind down their operations in Iran, or they will run afoul of the American banking system.

What doesn't Trump like about that?

Trump's decision and his threats to Iran raise questions about what legal grounds the USA can use to enforce Iranian compliance now that it has walked away from the worldwide pact, and whether the President is gunning for a confrontation. Also, probably, "It was Obama's idea so I hate it".

Shortly after the ban, Trump began subjecting the nuclear deal to a death by a thousand cuts.

"It is important that the progress made over many years of negotiation should not be lost", Ramaphosa said.


Not surprisingly, Israeli Prime Minister Benjamin Netanyahu hailed Trump's decision and said that leaving the deal unchanged would be "a recipe for disaster, a disaster for our region, a disaster for the peace of the world".

Morad Sabzevari was among thousands of jubilant Iranians who took to the streets to celebrate a nuclear deal with major powers in 2015.

Patty Murray, D-Washington, who said the risk of war had "dramatically increased" following President Donald Trump's announcement Tuesday that the U.S.is withdrawing from the global agreement to rein in Iran's nuclear programs.

Any impact, however, would take until August to be fully realised with some countries cutting supplies ahead of anticipated sanctions to step in line with USA regulators, while others such as China and India are likely to import more before sanctions come into full swing.

Long squeezed by both USA pressure and their own government, they had just cause for optimism.

"What's going to happen is the US Department of State is going to come up with a methodology on how they count the barrels and the benchmark they gauge against, [such as] the imports for first half of 2018 or May to November", said Mr Nasseri. "Our friends in the Middle East", particularly Israel and Saudi Arabia, wanted out. "Now that the United States has violated that and pulled out of it, it's hard to see how we're going to get those Americans out".

Still, companies are likely to stay away from Iran because of the legal risk.

"That'll have a significant ripple effect on Iran's economy". Gas prices are already rising at an unprecedented rate throughout North America - yes, that includes Canada - and that's just in anticipation of the sanctions. Does that mean that as part of this, Europe is bracing for the U.S.to actually impose sanctions, blocking European business there?

Mr Trump has alleged that the deal gave Iran millions in cash and did not prevent it from acquiring nuclear weapons.

In his presidential order quashing the deal, Trump said he was ready to keep talking. While N.K. isn't involved in the Iran deal, the US pulling out of a key deal they signed less than three years ago does not send a good message to a country looking to sign a similar deal.

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