Trump could harden Iran oil stance but struggle to stem flow to China, analysts say
Reuters-Nov7th2024
WASHINGTON, Nov 6 (Reuters) – Former President Donald Trump‘s return to the White House could mean tougher enforcement of U.S. oil sanctions against Iran, potentially trimming global supplies, but his administration could struggle to get China, Iran’s top crude customer, to cooperate, analysts said.
Cracking down on OPEC-member Iran would support global oil prices, but the effect could also be offset by other Trump policies, from measures to expand domestic drilling, the imposition of tariffs on China that could depress economic activity, or an easing of relations with Russia that could unfetter its sanctioned crude shipments.
“Trump cuts both ways for oil prices,” said Clay Seigle, an independent energy strategist in Houston, adding that tariffs and trade wars would pull down U.S. gross domestic product and oil demand with it.
Iranian crude exports have shot to the highest level in years in 2024 as the country found ways to sidestep punitive sanctions targeting its revenue. Trump re-imposed the sanctions during his first presidency after he unilaterally withdrew the U.S. from a Western nuclear deal with Tehran in 2018.
Trump, a Republican, has said during his campaign that President Joe Biden’s policy of not rigorously enforcing oil-export sanctions has weakened Washington and emboldened Tehran, allowing it to sell oil, accumulate cash and expand its nuclear pursuits and influence through armed militias.
Jesse Jones, head of North American upstream at Energy Aspects said a Trump administration return to a maximum-pressure campaign on Iran could lead to a 1-million-barrel-per-day decrease in Iranian crude exports.
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