Published: Wed, July 04, 2018
Finance | By Kristine Clayton

USA aims to reduce Iran’s oil revenue to zero

USA aims to reduce Iran’s oil revenue to zero

Oil prices rose last week on worries that US sanctions against Iran would take away significant volumes of crude oil from world markets while oil demand worldwide increases.

The statement said the kingdom will coordinate with other producers.

"Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue on crude oil sales", Hook said.

The restart of those sanctions has global energy buyers nervous as to who will replace those barrels.

Saudi Arabia's Oil Minister Khalid al-Falih arrives for an OPEC meeting in Vienna, Austria, June 22, 2018. Trump's tweet, however, mentioned no time frame for the additional 2 million barrels - whether it meant per day or per month.

The president, in an interview with Fox News's "Sunday Morning Futures with Maria Bartiromo also piled pressure on close U.S. allies with a threat to sanction European companies that do business with Iran".

"Recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy", United States bank JPMorgan said.

An agency report on Tuesday indicated, however, that despite the USA push on Saudi Arabia, futures in NY jumped as much as 1.7 per cent.

European countries have been attempting to negotiate exemptions for their firms, but the official confirmed that US President Donald Trump intends to stick to his deadline. That's led to higher prices at gasoline pumps in the U.S.as it heads toward midterm elections for Congress. But with inventories already below five-year averages and little spare capacity available, oil markets look set to tighten.

Overall, however, analysts said OPEC's production policy as well as unplanned supply disruptions were now the main price drivers.

"We are working to minimize disruptions to the global market, but we are confident there is sufficient global spare oil capacity", Hook said.

As Crude pressed lower, the US Dollar was pushing a high in its own right versus the Canadian Dollar. "Iran. OK. You think of it. Iran is their big enemy, so they are going to have to do it", Trump said. But Indian banks and insurers have said they would not finance oil transactions with Iran.

The spike was the latest fallout from the Trump administration's decision to abandon the landmark Iran nuclear deal and reimpose sanctions on Iran - a move that has strained relations between the United States and other world powers that support the deal.

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