Oil market could face drastic price change if the USA succeeds in pressuring other countries to curb exports from Iran, says Gareth Lewis-Davies, Energy Strategist at BNP Paribas.
“The effect of the EU sanction would be quite limited. But US sanctions, that might take effect at the end of this year is aimed at removing all of Iranian exports – 2.2mln barrels a day. And that would have a greater oil price impact”, said Mr Lewis-Davies.Asian countries are a key market for Iranian oil, and they would have to support the sanctions should they come into force to keep in the with US says Gareth Lewis-Davies. “As the US authorities are telling foreign governments and companies, that if they buy oil from Iran, it would pollute relationships with American organisations”, he explained. “As a consequence, the US sanctions would have greater impact as Asian buyers of Iranian oil look for alternative suppliers over the next six months or so.”Today the European Union agreed to the details of a possible embargo on oil deliveries from Iran. The sanctions are part of the EU's plan to stop Iran developing a nuclear weapons program.