Sweep your face! U.S. announced that its target for Iranian crude oil exports will be reduced to 50%
US cuts Iran’s oil export target to 50%
It is reported that the United States will persuade other countries to cut Iranian crude oil imports by up to 1 million barrels per day, or 50%, before they impose crude oil sanctions on Iran in November. Earlier, Trump also said that he wanted Iranian crude oil to export zero. Iranian crude oil is expected to cut by 70 to 1 million barrels per day. Although this figure is much better than zero exports, Iran’s average daily crude oil exports last year was about 2.1 million barrels. Even a 50% cut will bring huge economic impact to Iran, which is highly dependent on crude oil exports.
After Trump announced the US withdrawal from the Iranian nuclear deal in May, it lifted sanctions against Iran. Other countries are required to reduce the import of Iranian crude oil and even import Iranian crude oil. In other words, the United States wants to reduce Iranian crude oil sales by 100%. Brian Hook, the US official who led the lobbying of countries to stop importing Iranian oil, said in July that the US goal was to reduce the revenue of Iranian crude oil sales to zero. The United States also threatened countries, who would impose sanctions on Iran if they imported Iranian crude oil after November 4.
Trump lost support from the European Union
In fact, as early as 2011, before the signing of the Iranian nuclear agreement, Obama imposed the most severe sanctions on Iran. Although Obama had EU support at the time, it took a lot of time to achieve the goal of reducing Iranian crude oil exports. Finally, Iran had 1.2 million barrels per day of oil that failed to enter the global market. Now Trump wants to sanction Iran, saying that no difficulty is impossible. After all, it took so long for Obama to have EU support. This time Trump has lost support from the EU.
EU Foreign Affairs Commissioner Mogherini, Britain, France and Germany, Foreign Ministers Hunter, Ledrien and Mas, jointly condemned the US sanctions against Iran. After the United States withdrew from the Iranian nuclear agreement, the EU, China, Russia and Iran continued to abide by the relevant agreements. The agreement ensures that Iran can only use nuclear energy peacefully. The US sanctions against Iran will take effect on August 7, and European companies that do business with Iran will also be punished.
The European Commission believes that the "secondary" sanctions imposed by the United States on European companies are illegal. The US bans European automakers, banks and energy companies from doing business with Iran. If they violate this ban, their US property will be confiscated; US companies that have business relations with European companies operating in Iran will also be punished.
In response, the EU issued a so-called "blocking decree" to resist US sanctions. The new law - the latest version of the EU "blocking decree" came into effect on August 7. The law protects European companies that legally trade with Iran from US sanctions. The “blocking decree” prohibits EU companies from complying with US sanctions orders, allowing these companies to be compensated for the damage caused by such penalties, and any foreign court’s unfavourable judgment against them is null and void. The EU also warned that companies that comply with US sanctions may be subject to EU sanctions.
Therefore, analysts believe that the deadline of November 4 may actually only open a longer negotiation cycle. KevinBook, director of Washington Consulting's ClearViewEnergyPartners, said: "The United States or its rivals do not want to give up any useful chips in the negotiations in the next round of negotiations, resulting in a stalemate."
The United States cannot convince China to cut 50% of Iranian crude oil imports
Although South Korea has reduced Iranian crude oil imports, there are still many countries in the United States that have to spend a lot of energy to persuade. India and China account for nearly 50% of Iranian oil exports, and in the last Iranian sanctions, India and China were few countries that continued to buy Iranian oil. And after the last Iranian sanctions, China has had the trick to bypass the United States and continue to buy Iranian oil. India is also increasing Iranian oil imports, but the country is also increasing imports of US oil. Bloomberg believes that US Secretary of State Pompeo may pressure Indian officials to cut Iranian imports when she travels to India with US Defense Secretary Matisse in early September.
Even Japan, which has always been "respectful" to the United States, has indicated that it will negotiate with the United States and continue to import Iranian oil.
The US State Department is currently refusing to confirm the rumor that this target is down 50%, but one official said that the current goal is still to reduce Iranian oil exports to zero as soon as possible. In addition, the United States is meeting with officials from around the world to clarify the US plan. The official also stated that the US government is prepared to provide exemptions to countries on a case-by-case basis.