“Painful months for oil consumers” are coming, Iranian oil minister Bijan Zanganeh said Thursday, state TV reported.
The US has also granted waivers to almost all key clients of Iran’s crude oil for fear of further hikes in oil prices. The countries exempted from the US sanctions on Iran’s oil exports include China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, which together took in over 80 percent of Iran's oil exports last year.
On Monday, as part of the Trump administration’s “maximum pressure campaign” to get Iran to change its behavior, the U.S. reimposed oil and banking sanctions on Iran that were lifted under the 2015 nuclear deal.
Waivers, however, were granted to eight major importers to continue buying Iranian petroleum products without penalty for another six months.
Mr. Zanganeh said that while such moves by the Trump administration may have been able to “superficially” drop fuel prices ahead of the U.S. midterm elections — future price hikes were now likely.
“Trump thought he could shrink our country’s oil revenues by imposing sanctions on Iran’s oil and cutting its exports, but the rise in oil prices did not let that happen,” Mohammad Baqer Nobakht, the head of Iran’s Planning and Budget Organization, said last month.
Video: Iranian FM blasts U.S. sanctions on Tehran
“I gave some countries a break on the oil,” he said during a lengthy, wide-ranging press conference in Washington to address the midterm elections. “I did it a little bit because they really asked for some help, but I really did it because I don’t want to drive oil prices up to $100 a barrel or $150 a barrel, because I’m driving them down.
October marked a reversal for the crude-oil market, which had rallied sharply in 2018, with gains fueled in part by fears that the Trump administrations renewal of sanctions against Iran, bottlenecks in U.S. shale-oil producing regions and strong domestic economic growth would tighten the oil market. WTI hit a nearly four-year high above $76 a barrel on Oct. 3, while Brent crude LCOF9, -1.84% the global benchmark, topped $86 a barrel. Brent is off more than 18% from its recent high.
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“If you look at oil prices they’ve come down very substantially over the last couple of months,” Mr. Trump said. “That’s because of me. Because you have a monopoly called OPEC [the Organization of Petroleum Exporting Countries], and I don’t like that monopoly.”
West Texas Intermediate crude for December delivery CLZ8, -2.04% on the New York Mercantile Exchange fell $1, or 1.7%, to settle at $60.67 a barrel, marking its ninth straight losing session and the lowest close since March. The finish left U.S. oil down 20.6% from its Oct. 3 peak, meeting a widely applied definition of a bear market as a pullback of 20% from a recent high.
After hitting a four-year high early last month, oil prices have fallen about 20 percent with Brent crude trading Thursday about $71 a barrel.
Signs that the Organization of the Petroleum Exporting Countries, or OPEC, led by Saudi Arabia, and its allies, particularly Russia, had boosted production in anticipation of the sanctions. Earlier this month, the White House granted waivers to eight countries, including some of the biggest buyers of Iranian crude, to allow them to temporarily continue imports.
On Thursday, Hossein Kazempour Ardebili, Iran’s representative to OPEC, claimed Russia and Saudi Arabia were helping the Trump administration by increasing their own production to keep oil prices low.
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Earlier this week, Mr. Zanganeh wrote to OPEC complaining that some members of the so-called Joint Ministerial Monitoring Committee — which consists of all OPEC and non-OPEC countries — “openly” side with the U.S. regarding sanctions on Iran, The Associated Press reported.
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The issues is likely to rear its head next week when OPEC gathers in Abu Dhabi, the capital of the United Arab Emirates.
New U.S. sanctions on Iran—which have come under fierce criticism by Iran hawks in Congress and elsewhere for providing major concessions to Iran and its European business partners—have failed to cover “half of the publicly listed firms under the principal control of the regimes security forces,” according to research conducted by the Foundation for Defense of Democracies, a think tank that has worked closely with the administration on national security issues.
On Wednesday, Washington warned global shipping and insurance industries not to allow Iranian oil tankers into their territorial waters or ports, saying such access may run afoul the reimposed sanctions, in addition to increasing the possibility of catastrophic economic and environmental damage if any accidents occur.
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Brian Hook, special U.S. representative for Iran, said that as major insurers withdraw coverage for Iranian vessels, Iran will likely turn to domestic insurance companies that will be unable to cover losses for major maritime accidents.
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Rep. Eliot Engel, the top Democrat on the House Foreign Affairs Committee, is poised to take the chairmans gavel from retiring Republican Ed Royce of California. While the new Democratic majority is threatening investigations into the Trump administration, Engels rise could help fortify one of the administrations most controversial policies: the presidents crackdown on Iran in the wake of the withdrawal from the 2015 nuclear deal forged by then-President Barack Obama.
I really believe that Iran is the most dangerous player in the region, Engel said at an event hosted by The Israel Project last year, and some expect him to help find a bipartisan path on foreign policy with Trump.
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Congressman Engel has shown strong and thoughtful leadership on critical foreign affairs issues and, as exemplified by his hand-in-glove work with outgoing chairman Ed Royce, was a model for working in a bipartisan manner — so critical in what can be a polarized Congress, Toby Dershowitz, senior vice president for government relations at the nonpartisan Foundation for Defense of Democracies, told the Washington Examiner. That bipartisanship will be desperately needed if the U.S. is to continue having an impact addressing Irans malign activities, including its destabilizing presence in Syria, Iraq, Yemen and Lebanon, its continued missile proliferation, its rearming of Hezbollah, and its serious human rights abuses at home and abroad.
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When Obama lead his party in a rapprochement with the pariah regime, Engel argued against the Iran deal. After Obama committed the United States to the nuclear deal, he believed that Trump should not withdraw from the pact, but instead enforce it strictly. His attitude, in either instance, remained anchored in the belief that Iran represents a unique threat in the Middle East.
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That puts him at odds with many Democrats, although he was also at odds with the Trump administration after it said it would withdraw from the agreement but stop short of imposing maximum sanctions back on Iran.
Whatever its flaws, withdrawing from the Iran deal was a mistake, Engel said last week. We do need to be tough on Iran, but weve given up the assurances that Iran will abide by the limits and strict monitoring of the nuclear agreement. At the same time, adversaries around the world may rightly wonder whether American sanctions should be taken seriously, or if theyre just tough talk.
The first round of penalties, which included cars, carpets, metals trading and access to the US dollar, entered force in August. The second batch came into effect on November 6, hitting oil and shipping sectors. Washington also threatened secondary sanctions on nations and corporations that continue to do business with Tehran.
Still, that posture has Iran hawks optimistic about working with him, even in a polarized Congress led by Senate Majority Leader Mitch McConnell, R-Ky., and likely speaker Nancy Pelosi, D-Calif.
The potential for cooperation isnt just a matter of bipartisan temperament, as Engel made clear while seated next to Royce at the Israel Projects 2017 event. Theres not any difference in the way we think about this issue, the New York Democrat said. I could take his speech and read it. He could take mine and read it. We all agree with it. And, really, thats the way foreign policy should be. It should be bipartisan, where possible.
That doesnt mean hed be a pushover for the administration. I wont stand for delay and non-responsiveness to things that are clearly in our jurisdiction, he told the Washington Post in an interview published Thursday.
Engel is also interested in investigating whether Trumps business dealings have shaped his policy to Russia or other governments. Its a valid topic for us to look into, Engel added. There has been a concern about the motivations of the administration in terms of policies in different countries, and is it connected to Trumps business interests.
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But even his skepticism of Russia foreshadows a hard line with respect to Iran and the 2015 nuclear deal.
“Theyre all in it together,” Engel told the Israel Project in 2017. “Russia and Iran have collaborated, its my belief that they collaborated all during the negotiations on the JCPOA [nuclear deal] and I think that thats — the old line of the axis of evil, I think this is the axis of evil today. And we have to confront it.”