Press Release

Energy Intelligence Outlines Oil Market Risks From US IRAN Sanctions

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US President Donald Trump’s decision today to withdraw from the Iran nuclear deal will remove about 700,000 barrels per day of Iranian oil supply from world markets, according to Energy Intelligence modeling.

By withdrawing from the Iran nuclear deal, President Donald Trump opted for an aggressive rollout of sanctions accompanied by clear Treasury guidance for implementation. The decision is consistent with Energy Intelligence’s “Bold Approach” scenario, under modeling prepared in advance through extensive conversations with upstream and trading contacts.

The Bold Approach scenario sees Iranian exports cut by about 540,000 b/d in the fourth quarter of 2018 and 690,000 b/d by mid-2019. It assumes the Trump administration aggressively enforces the sanctions’ requirement for “significant reductions” of Iranian oil imports above and beyond the Obama administration’s 20% target, and that major companies comply with guidance. It assumes that Europe and other countries eventually put in place blocking regulation, but that this does not show an impact until 2019.

In moves consistent with this scenario, Trump revoked all sanctions waivers simultaneously, including those that did not expire until July. Treasury guidance also gave a 180-day wind-down period, during which countries will be under pressure to negotiate and implement “significant reductions” to receive sanctions exemptions.

“While it is likely to take six months for sanctions to come into force, some buyers are expected to cut earlier in order to comply with US sanctions,” says T.J. Conway, Manager with Energy Intelligence’s Research & Advisory division in Washington, D.C. “A major disruption by late 2018 would be clearly bullish, with tighter markets amplifying the impact.”

Energy Intelligence also concluded that new sanctions will have a limited impact on Iran’s upstream development, mainly because most Western companies have already been deterred by the threat of remaining or potential US sanctions. We believe Iran could still deliver 300,000 b/d of its planned 700,000 b/d capacity addition by 2021, from current levels of 4 million b/d, helped by its long experience with operating under sanctions.

Energy Intelligence is the leading independent provider of news, unbiased analysis and reliable data and research for the global energy industry.


Note to Editors: For more details on Energy Intelligence’s Iran sanctions scenarios, please contact:

T.J. Conway
Manager, Research & Advisory, Energy Intelligence
+1 (202) 662-0702 |

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