Oil Holds On to Gains After Trump's Iran Decision

Oil Holds On to Gains After Trump's Iran Decision

Oil Holds On to Gains After Trump's Iran Decision

Bolton said on CNN's "State of the Union" that he believes some European countries will end up supporting the United States despite comments from European leaders that they regret Trump's decision to withdraw.

The imminent re-imposition of sanctions leaves Iran facing renewed economic turmoil.

The large currency network in Iran and UAE has "procured and transferred millions in U.S. dollar-denominated bulk cash to Iran's Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to fund its malign activities and regional proxy groups", the U.S. Department of Treasury said in a news release.

And finally, higher prices will encourage more non-OPEC production, especially from US shale producers that have capped productive but higher-cost wells.

Trump argued that the 2015 deal, which allowed for the lifting of sanctions, wasn't tough enough on Iran.

The United States plans to reintroduce sanctions against Iran, which pumps about 4 percent of the world's oil, after abandoning a deal reached in late 2015 that limited Tehran's nuclear ambitions in exchange for the removal of US and European sanctions.

The pact was signed to prevent Iran from developing nuclear weapons, and in effect made it impossible for the country to produce a bomb.

With European companies starting to count potential losses, their withdrawal from Iran could open the door to Chinese firms, says Bijan Khajehpour, managing partner of Austria-based consulting firm Atieh International.

More news: Oil Rises to New Three-Year Highs

Iran was India's second biggest supplier of crude oil after Saudi Arabia till 2010-11 but western sanctions over its suspected nuclear programme relegated it to the 7th spot in the subsequent years.

USA light crude was down 16 cents at $71.20, having touched a 3-1/2 year high of $71.89 on Thursday. "Who will buy Iranian oil and who will side with Trump".

The Iranian crude oil export took a nosedive after sanctions were imposed on the country back in 2012, limiting its oil production to 2.5 million barrels per day (it had previously been 3.8 million).

Crude oil has zoomed above $71 a barrel, returning to levels not seen since late 2014 and pushing up pump prices. If you are too aggressive and Iran starts dumping oil on the market, you could be in for a world of hurt.

The price action suggests that if the US follows through on the sanctions against Iran, no one, including Europe and China, is going to oppose the move.

Britain, France and Germany on Tuesday pledged to remain in the Iranian nuclear deal despite Trump's decision to pull America out of the agreement.

"We urge the United States 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. However, European leaders did not really do much to salvage the deal beyond trying to coax Trump into remaining in it, or - worse yet from an Iranian point of view - appeasing Washington at Tehran's expense.

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