Trump’s Sanctions Risk Disrupting Global Oil Markets

Administration seeks to cut into Venezuela, Iran exports

With oil prices floating around a near 52-week high, there isn’t a lot of ready supply just floating around, and the market is increasingly sensitive to any indication that availability could be further cut by US government action.

Unfortunately, this matters because the Trump Administration is very interested in taking actions that would greatly reduce the amount of oil, which they are already limiting, that is coming out of Iran and Venezuela.

The administration is following what seems to be usual US sanctions reasoning, which is that if the United States has a problem with that country, they aren’t allowed to sell oil anymore, ad woe betide anyone caught buying that oil.

In early May, the waivers the US gave to some nations to keep buying Iranian oil are set to expire, and the administration is talking up the idea of renewing less of them, or potentially none of them, with the ultimate goal of “exports to zero” for Iran.

With Iran exporting roughly a million barrels of oil a day, however, that threatens a massive disruption on the global markets, fueling a price hike everywhere, and potentially giving the administration the political headache of rising gas prices within the US.

Officials would blame a price hike on Iran, naturally, but despite all the rhetoric, the rest of OPEC simply isn’t in a position to make up the difference, nor necessarily has the inclination to do so. The US making dictating global oil commerce a centerpiece of their foreign policy is simply running up against practical limitations, as they can only control supply, and not demand.

Author: Jason Ditz

Jason Ditz is news editor of Antiwar.com.