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World Powers Trying to Save Iran Deal to Meet in Vienna, Without U.S.
By Jack Farchy and Dina Khrennikova
The world’s top oil trader said it will be near impossible to avoid U.S. sanctions on Iran, suggesting Donald Trump’s attack on OPEC’s third-largest producer may have a bigger impact on the global crude market than many anticipate.
“For us it’s a real challenge,” Vitol Group Chairman Ian Taylor said on Friday at the St. Petersburg Economic forum, adding there are unanswered questions about Europe’s response, and whether the European Central Bank will “stand up” to Trump’s measures. “I personally think none of us will be able to get around it.”
President Donald Trump said May 8 he was withdrawing the U.S. from an international pact on Iran’s nuclear program and reimposing sanctions that will force other nations to cut purchases. So far, there’s been little clarity about how his actions will impact the oil market because there’s less international support than last time. In particular, it’s been unclear by how much European refineries will cut purchases, if at all.
In the prior sanctions, which ran from 2012 to 2016, a handful of mostly Asian countries carried on purchasing but had to show the U.S. that they were lowering imports to avoid their banks losing access to America’s financial system. European purchasers all withdrew.
Taylor’s comments echo recent remarks by some of the world’s biggest oil companies and traders. Total SA CEO Patrick Pouyanne said nobody can have “any illusions” about European companies being exempt from U.S. sanctions. Bob Dudley, his counterpart at BP Plc, said his company won’t test the waters when it comes to Iran sanctions.
This time around, Europe is pushing back against Trump’s sanctions, raising the question about whether the bloc will organize a way for imports to continue. That would require a workaround in the financial market, and probably some new means of insuring tankers bringing cargoes from the Islamic Republic.
