U.S. sanctions on Iran are now really starting to bite. In contrast to what European media portray, Iran’s oil and gas exports are plunging. Tehran’s ability to supply its Asian customer base has been largely blocked, as Washington has decided not to extend the waivers given to China, India or others to keep on signing crude contracts.
U.S. president Trump still boasts that Iranian exports will be falling to zero, but some tankers are still going to slip through the cracks. ‘Illegal’ crude oil trade will be almost negligible, however, as Iran’s main customers have realized that Washington’s wrath will be real. The mullah regime in Iran also put its trust in a possible European answer, but European companies have chosen to be very cautious, and not to rely on the EU to mitigate potential U.S. sanctions against their operations. The more robust line taken by Washington, supported by Arab allies, seems to be working, as long as analysts are keeping an eye on Iranian oil sector options.