International oil customers should brace for pain as U.S. sanctions on Iran take hold, the Islamic Republic’s oil minister has warned, arguing that waivers Washington granted to eight major oil-importing countries are not enough to keep global markets stable.
“Painful months for oil consumers” are coming, Iranian oil minister Bijan Zanganeh said Thursday, state TV reported.
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.
On Wednesday, President Trump took credit for keeping oil prices low.
“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.
“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.”
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.
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.
Mr. Trump has repeatedly has asked oil producers to pump more crude to lower prices.
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.
The issues is likely to rear its head next week when OPEC gathers in Abu Dhabi, the capital of the United Arab Emirates.
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.
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.
• This story is based in part on wire service reports.
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