Baku, Azerbaijan, Feb.11
By Leman Zeynalova – Trend:
The main determinant of Iranian oil export levels in 2019 will be the US' approach to sanctions waivers, Trend reports citing Fitch Solutions Macro Research (a unit of Fitch Group).
The company experts believe that Washington's position towards Iran is rhetorically hawkish, but relatively dovish in practice - at least in regards to oil.
“While the US continues to espouse a zero-export policy, it has proved unwilling to pursue this at the expense of the US consumer. As such, we believe that while Washington will make downward adjustments to the waivers – likely both in number and in volume - in May, the adjustments will be comparatively small,” read a report from Fitch Solutions.
The company expects this will send the appropriate political message, without triggering a spike in the oil price.
“Higher oil prices are an important issue to American voters and the Trump administration will not wish to pile further pressure on the electorate ahead of the 2020 presidential race. Ultimately, the willingness of Washington to adopt a more aggressive approach to Iranian oil trade will hinge on the looseness of the global marketplace, the level of prices, and the availability supply elsewhere to offset the losses from Iran.”
The view of Fitch Solutions is for a fundamental tightening in the market and a rise in oil prices in 2019, leaving the US less scope to unwind the waivers.
US President Donald Trump declared Washington’s withdrawal from the nuclear deal with Iran in May 2018. Trump also announced the restoration of all sanctions against Iran, including secondary ones against other countries doing business with Iran. The United States re-introduced part of the sanctions against Iran on August 7, 2018, while the second batch of the sanctions came into effect on Nov.5, 2018.
The US government has agreed to let eight countries, including South Korea and Japan, as well as India, keep buying Iranian oil after it reimposes sanctions on Tehran. The waivers have been granted for six months.
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