Iran's oil customers in Europe might reduce imports, flag financing issue

The head of OPEC has warned that a decision by President Donald Trump to abandon the Iran nuclear deal would harm the global economy

The head of OPEC has warned that a decision by President Donald Trump to abandon the Iran nuclear deal would harm the global economy

So, what happens next?

The agreement was made by Iran and the United States, the UK, Russia, France, China, Germany and the European Union to ensure Iran's nuclear programme was "exclusively peaceful". If history is any guide, there is little chance of this happening, so we are now on a course of escalating confrontation.

Paris. Europe is prepared to introduce measures to nullify the effect of Donald Trump imposing sanctions on any non-US firm that continues to do business with Iran, the French government has said, The Guardian writes.The warning from the French finance minister, Bruno Le Maire, suggests Trump's proposals to corral Europe into joining United States foreign policy on Iran may lead to a severe backlash by EU firms and politicians, especially advocates of a stronger independent European foreign policy."We have to work among ourselves in Europe to defend our European economic sovereignty", Le Maire said, adding that Europe could use the same instruments as the USA to defend its interests.On Friday Le Maire put forward three main proposals starting with an EU-wide blocking statute similar to an EU regulation passed in 1996 created to nullify any U.S. sanctions imposed on EU firms.

News of the deal prompted a volatile trading session on Tuesday in the heaviest volumes for front-month USA crude futures since November 30, 2016.

Iran's Petroleum Minister Bijan Namdar Zangeneh has said that the USA exit from the 2015 Iran nuclear deal will not affect the oil industry, state TV reported on Friday. The EU, China and Russian Federation have said they are sticking with the deal.

In the CNN interview, Bolton did not respond directly when asked whether Trump might seek "regime change" in Iran, or whether the US military would be ordered to make a preemptive strike against any Iranian nuclear facility. They are talking about how they can protect their companies from American sanctions, and how they might retaliate.

Directly and indirectly, these sanctions will impact on those who deal in Iranian oil, insure Iranian crude oil cargoes, underwrite tankers in Iranian waters, and on the National Iranian Tanker Company (NITC).

President Trump's decision to pull out of the Iran nuclear deal has sent shock waves rolling through the region and amplified widespread public anger. The US crude oil reached another record last week, climbing to 10.7 million barrels per day.

Iran will prepare for the "industrial scale" production of nuclear fuel even as it seeks guarantees from other countries to honor the Iran deal despite the recent United States' withdrawal from the agreement.

Over and above the withdrawal, Trump reimposed the highest level of economic sanctions on Iran. A 20 percent reduction was an unofficial rule of thumb during the Obama era.

In the lead up to the announcement, Foreign Secretary Boris Johnson appeared on Fox News, Mr Trump's favourite station, to make the case for sticking with the landmark agreement, signed during the administration of predecessor Barack Obama. In exchange, Iran agreed to restrictions on its nuclear program, making it impossible to produce a bomb and establishing rigorous inspections.

Earlier on the day, Russian President Vladimir Putin and German Chancellor Angela Merkel also reaffirmed their commitment to preserving the 2015 landmark nuclear agreement despite the United States move to pull out of it. This is unlikely to happen this time around as the U.S. has revoked the deal unilaterally and against the will of most other countries.

In hearing all of these honeyed voices speak, one might think that Iran has been acting responsibly for the last three years, that it hasn't been pursuing a campaign of horrific terrorism in Yemen and Syria, that it hasn't been sponsoring the takeover of Lebanon by the terrorist group Hezbollah, that it hasn't been funding the Palestinian terror group Hamas, that it hasn't been developing long-range ballistic missiles while leading chants saying "Death to America".

Saudi Arabia appeared to confirm the existence of an understanding by committing to maintain "the stability of oil markets" and more specifically to "mitigate the impact of any potential supply shortages". The bank lowered its forecast for Iranian output by 150,000 bpd in 2019, a volume that would be offset by higher shipments from Saudi Arabia.

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