U.S. Official: No Concerns About Oil Supply Shortages After Iran Sanctions

A U.S. State Department official stated on Friday, March 1, that the Trump administration has no concerns regarding the level of oil supply in global markets following the re-imposition of unilateral sanctions against Iran. According to Reuters, U.S. laws require the Energy Information Administration, part of the Department of Energy, to monitor oil supply in the market to ensure compliance with sanctions. Frank Fannon, the U.S. State Department's representative for energy affairs, said in a speech at the Center for Strategic and International Studies, "Given the monthly statistics from the Energy Information Administration to adjust actions based on forecasts, we are very comfortable." He added, "I think this is a strong message." Meanwhile, the U.S. Department of Energy announced on its official website that it will sell six million barrels of the country's strategic oil reserves. These shipments are set to be sold next month, with buyers expected to receive them in the first half of May. President Donald Trump, who is critical of the nuclear deal between Iran and six world powers known as the JCPOA, announced on May 8 of this year that the U.S. would withdraw from the agreement. Following the U.S. exit from the nuclear deal with Iran, Trump ordered the reinstatement of sanctions that had been suspended under the JCPOA framework. U.S. officials have consistently expressed their intent to "reduce Iran's oil exports to zero," while Iranian officials have deemed this impossible. However, in November 2018, the U.S. granted waivers to eight countries—China, India, South Korea, Japan, Taiwan, Turkey, Italy, and Greece—for six months to continue limited purchases of Iranian oil during that timeframe. Previously, Reuters reported that Iran currently exports oil and gas to Iraq, Turkey, China, India, Japan, and South Korea. Taiwan, which had received a waiver from the U.S., has currently halted its purchases of Iranian oil. In this context, Bijan Zanganeh, Iran's oil minister, stated that Italy and Greece, which are exempt from U.S. sanctions, are not purchasing any oil from Iran and have refused to explain the reason. Meanwhile, Brian Hook, head of the U.S. State Department's Iran Action Group, stated on February 5 that the U.S. has no plans to extend the waivers for Iranian oil sanctions. Before the sanctions, Iran was selling 2.5 million barrels of oil and gas condensate daily. However, Iran's budget bill for the next year (1398) forecasts daily oil exports of 1.54 million barrels, which is effectively 30% higher than the current exports.