Trump exit from nuke deal won't affect oil industry: Iran

Trump's decision opens the door to greater USA confrontation with Tehran and strains relations with America's closest allies, current and former diplomats said. Iran says its nuclear program is for peaceful purposes only.

Aerospace companies had been perhaps the biggest beneficiary of the Iran nuclear accord, which recognized the need for Iran to modernize its airplane fleet.

America's allies in Europe have expressed dismay at the JCPOA move. Germany and France have significant trade links with Iran, as does Britain. Then, Iran's foreign sales fell to just over 1 million bpd, with the majority coming from four buyers - China, India, Japan and South Korea. It will likely maintain its current import levels, around 500,000 bpd, along with state-backed insurance for oil shipments, unless Europe follows the applying a new round of restrictions.

The reduction is partially the result of hedging in anticipation of President Trump's withdrawal from the Iran deal.

The EIA on Tuesday raised its forecast for US output in its monthly report to 12 million bpd late next year. Japan continues to employ a mechanism in which the government provides insurance for its shipments of Iranian oil, escaping reliance on sanctions-sensitive USA and European insurance firms.

Hinderstein said there is every indication that the USA is preparing to pull out of other non-inspection mechanisms in the agreement, including converting the Arak heavy water reactor and the "procurement channel" that regulates the import of dual use materials to Iran. These sanctions will be far less effective than those imposed in 2012, with their success or failure largely outside of USA control. Oil prices might fall under that scenario, and high prices have a self-correcting mechanism in the form of US shale oil.

"These missiles are Iranian manufactured and delivered to the Houthis".

The aircraft makers will avoid serious damage.

A number of voices in Iran have suggested the deal is unlikely to survive.

Washington has given grace periods of 90 days to six months for companies to wind down their trade with Iran. It has not delivered any airplanes and never firmly booked the orders.

Asia's petroleum refiners are seeking alternative supplies as they prepare for renewed United States sanctions against major oil exporters amid a tight market. "And the Iranians must be held accountable for this", Jubeir told CNN.

Worldwide oil prices hit their highest since late 2014 this week on worries that revived sanctions would tighten global supplies.

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Planemakers Airbus and Boeing, oil companies and auto manufacturers like France's Renault and Peugeot could be among companies hardest hit. Total did not respond to requests for comment.

After sanctions were eased as part of the nuclear agreement, Iran ramped up production to about 3.8 million barrels a day.

The policy change, announced in an afternoon speech by President Donald Trump, had been largely expected by traders, who sent crude oil prices sliding more than 2 percent a day after crude reached above $70 a barrel for the first time in more than three years. When Prince Salman revealed the IPO plan, the price was under US$40 a barrel; today, Brent crude, the global benchmark, is going for US$77 - a gain of more than 50 per cent in the past year alone.

Brent crude oil futures at one point touched their highest since November 2014 at 76.75 dollars per barrel.

Analysts now expect Iran's supplies to fall by 300,000 bpd to 1 million bpd, depending on how many other countries fall in line with Washington. On Tuesday however, Saudi Arabia promised to work with other OPEC members to "mitigate" the impact of any supply disruptions.

No one knows exactly how high prices will go. Shares were higher in most other markets apart from Singapore.

ANALYST TAKE: "It is worth noting that global equity markets remain highly sensitive to geopolitics and speculation of higher interest rates", said Lukman Otunuga, research analyst at FXTM. "As we have throughout this process, we'll continue to follow the USA government's lead".

That made Iran the third biggest exporter of crude within the Organization of the Petroleum Exporting Countries, behind Saudi Arabia and Iraq.

Germany is Iran's biggest trading partner in Europe, although bilateral goods exchange was negligible with a volume of only €3.5 billion a year ago. He did not name the countries. Therefore, they have to provide the hawks in the Trump Administration (Pompeo, Bolton, et al) with a plausible pretext for starting the war, and a couple of downed Israeli planes would do nicely. It said it will comply with any sanctions.

The extraordinary thing is that there is no Plan B. If Donald Trump's re-imposition of American sanctions on Iran does not cause President Hassan Rouhani's Government to buckle at once (which is nearly unimaginable), there is nothing else he can do short of going to war with the country. Firms would not be allowed to strike new deals with Iran. Certain exemptions are to be negotiated, but Mnuchin refused to discuss what products might qualify.

Most of the companies should be able to withstand the loss of deals in Iran.

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