US optimistic it can cut Iran out of oil market in 2019
In April 2018, a month before Washington withdrew from the nuclear deal, Iran exported 2.5 million barrels of oil per day (bpd). By February 2019, exports were halved, to 1.25 million bpd, and inflation spiked, causing the Iranian currency, the rial, to lose over 60 percent of its value.
“The policy of the United States is that we are not looking to grant any new oil waivers,” US State Department’s special representative for Iran, Brian Hook, told VOA on Wednesday. “We have taken off roughly 1½ million barrels of Iranian crude, and we have avoided a price increase in oil. And that’s not an accident. We’ve done it very well and very carefully.”
The Trump administration’s bellicose stance against Iran has caused furious reactions from hardliners in Tehran who claim the ultimate aim of the US government is regime change in the country. The US government says Iran should stop its malign activities in the Middle East and the Islamic Revolutionary Guard Corps (IRGC) must end their destabilizing activities across the region.
The US Treasury announced on March 26 that it had disrupted a “large scale front company network” that was transferring over one billion dollars to IRGC and Iran’s Ministry of Defense. “We are targeting a vast network of front companies and individuals located in Iran, Turkey, and the UAE to disrupt a scheme the Iranian regime has used to illicitly move more than a billion dollars in funds,” said Treasury Secretary Steven T. Mnuchin.
Iran’s oil income has declined sharply in recent months at a time when torrential rains have caused large scale floods in several regions across the country, leaving at least 44 people dead and thousands homeless and in desperate need of assistance.
Bahram Ghasemi, the Foreign Ministry spokesperson, reacted angrily to Hook’s remarks, saying the US official, like John Bolton, suffers from chronic sadism against Iran. Hook’s comments stem from “lack of correct understanding of the global conditions and unstable and shaky position… of the US in the world,” Ghasemi stated.
In November, Washington gave eight nations – China, India, Japan, South Korea, Taiwan, Turkey, Italy, and Greece – six months to continue buying Iranian oil without incurring sanctions.
Iraq was given a waiver to continue energy imports from its neighbour. The US government extended Iraq’s waiver for a second time on March 19, allowing Baghdad to continue importing Iranian natural gas and electricity for 90 another days. It is not clear how the Iraqi government is going to provide electricity when the waiver runs out, especially for the population in the south of the country where temperatures rise to 50 degrees Celsius in the summer.
Reuters reported earlier this month that the Trump administration was prepared to renew waivers for most buyers of Iranian oil as long as these countries pledge to cut combined imports to below one million bpd by May.
Hook, however, said that a forecasted glut of supply on the global oil market would help to shut down Iran’s oil exports.
“2019 is going to be a much better market for global oil supply, and the forecasters say that there will be more supply than demand. That gives us much better market conditions to accelerate our path to zero imports,” Hook told VOA. “The current oil waivers expire on May 2. And so the secretary, in consultation with the president, will make a final decision.”
Ali Vaez, an Iran expert at the International Crisis Group, said there is a "tug of war" between keeping oil prices low and the US applying "maximum pressure" on Iran through moves like the Warsaw conference, recognizing Israeli sovereignty over the Golan Heights, and the introduction of more sanctions. He expects this will continue as the waivers near their expiration date.
Rudaw
