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The Trump administration announced last week that it would not renew the six-month waivers granted to eight countries to continue buying limited quantities of Iranian oil, an initiative that shocked experts and provoked a chaotic week in the global oil market. Trump is on a tightrope as he tries to completely shut Iran out of international oil markets and put the country's economy under pressure to push Tehran to comply with US demand while trying to keep prices low. low gasoline in the United States.
The equilibrium was already hard to reach, but it was made almost impossible now that Russia was found to be exporting contaminated crude oil, saturating European refineries and making an already fragile oil market more volatile than before. Last week, after the discovery of contamination of crude oil coming out of the Ural Mountains by the Druzhba pipeline, European oil refineries stopped importing oil not only from this region but also of Russia as a whole, which has had an impact on the exports of the Ust-Luga export terminal. in the Baltic region too. According to new reports, the oil has been "deliberately contaminated" at the private terminal of Samaratransneft, according to the Russian pipeline operator Transneft. Overall, the amount of Russian crude oil absorbed by crude oil is about 1.5 barrels per day. Add to that the huge amounts of Iranian oil that the United States hopes to smother and there is no chance the market will feel this pressure.
Oil prices have already risen this year, but last week's announcement that the Trump government would end waivers of Iran's crude oil, known as "significant reduction exceptions," further raised crude oil benchmarks. Currently, the price of gasoline has increased by almost 30% since the beginning of the year and is now only 10 cents from the record price of 2018. Related: US pipeline boom could end in crisis
The heavy heavy oil is compromised, the heavier crude coming from Russia is compromised, the Venezuelan heavy crude is sanctioned by the sanctions imposed by the Iranian oil and by problems with other heavy crude oil producers like the. Angola, which faces its own production difficulties. Countries that continue to produce at high volumes, such as the United States, provide much lighter crude oil that does not satisfy the same market sectors. As such, high crude prices have been hardest hit.
The Organization of Petroleum Exporting Countries (OPEC) has shown no sign, despite Trump's incentives, that it will extract more oil to offset the loss of crude oil through US sanctions on Iran and the United States. Venezuela, mention contaminated Russian crude. Representatives of OPEC countries, including Kuwait and Saudi Arabia, have stated publicly that they would not do anything immediately to increase oil production and that their primary goal was simply to ensure the stability of oil prices and a balanced global market.
Until now, the United States is committed to ending sanctions exemptions, but many countries are doing their best to change Trump's ideas. China and Turkey have publicly criticized harshly the severity of the sanctions, accusing the United States of having exceeded their rights, and some analysts speculate that the two countries could defy the American sanctions against Iran. Meanwhile, India, South Korea and Japan, which had already benefited from a waiver, are conducting lobbying campaigns to change Washington's position in order to expand their important exceptions in terms of reduction. Many columns of opinion have also been devoted to whether or not India would accept US orders. Italy, Greece and Taiwan, for their part, do not need to invest in their own lobbying because they have never used their exemptions.
By Haley Zaremba for Oilprice.com
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