Britain's Theresa May and Donald Trump agree talks needed over Iranian sanctions
- by Shawn Tate
- in Economy
- — May 16, 2018
"The Europeans should not have to pay for the withdrawal from an agreement by the U.S., to which they had themselves contributed".
"President Trump is clearly articulating that he has minimal desire in an alternative agreement with Iran", said Ehsan Khoman, head of research for Middle East and North Africa at Mitsubishi UFJ Financial Group.
Crude surged past $71 for the first time since 2014 as American stockpiles shrank and the USA told crude buyers to curb purchases from Iran. "The Treasury Department thanks the UAE for its close collaboration on this matter".
This week, US President Donald Trump announced that he has withdrawn from the Iran nuclear deal and is set to renew sanctions on Iran.
Tehran agreed in 2015 to curb its uranium enrichment programme in exchange for sanctions relief after mammoth negotiations with the US, France, Germany, the United Kingdom, China and Russian Federation.
Trump did not offer any new justification for how Iran was violating the nuclear accord - the IAEA confirmed on May 9 that Iran is in compliance with its nuclear commitments - and offered no Plan B or even a coherent strategy on what comes next.
The investors are anxious that renewed sanctions against Iran, a major oil producer, could lead to supply disruptions.
Divisions in Iran over how it should respond to the US pullout were illustrated as senior cleric Ayatollah Ahmad Khatami told worshippers at Tehran University on Friday that European nations could not be trusted.
Last week, the U.S. President Tumps showed his intentions of renewed sanctions in response to Iran's nuclear program.
Iranian crude oil shipments to Japan and South Korea have fallen by half from their post-sanction peak in March 2017, hitting just over 300,000 bpd in April, according to ship tracking data from Thomson Reuters Eikon.
One factor that could partially mitigate any shortfall from Iran is soaring US oil output. The rally is being driven by looming USA sanctions against major oil producer and OPEC-member Iran which threaten to drive prices even higher over the near-term as traders prepare for an even tighter supply situation.
Soon after the announcement, oil prices rebounded to trade at the highest level since 2014 with Brent crude oil climbing 2.5 per cent to $76.75. Iranian leader Rouhani has categorically warned the U.S. and referred that United States will have "historic remorse" for pulling out of the deal. There will be a 90-day and 180-day wind down period before sanctions really start to bite, which puts the deadline at early November.
On Tuesday, President Trump declared that the United States is now pulling out from the so-called Iran Deal, an global agreement for lifting sanctions on Iran in exchange for the cessation of its nuclear weapons program.
According to Credit Suisse, the last time Iran was subject to global sanctions (between 2010 and 2016) its oil exports fell from 2.2 million barrels per day to around 1.1 million barrels.
"We urge the U.S. to ensure that the structures of the JCPOA can remain intact, and to avoid taking action which obstructs its full implementation by all other parties to the deal", a statement provided by British Prime Minister Theresa May's office said.
