June 06, 2022 (MLN): Vitol, the biggest independent crude trader said that the US may allow more sanctioned Iranian oil onto global markets even without a revival of the 2015 nuclear accord, reported by Bloomberg.
While a new agreement would limit Iran’s atomic activities and ease US sanctions on its energy exports, talks between Tehran and world powers have stalled since March. Oil traders are increasingly pessimistic that negotiators will strike a deal.
Still, US President Joe Biden could decide that the need to bring down record-high pump prices ahead of November’s midterm elections outweighs the benefit of strictly enforcing sanctions, including by seizing more Iranian oil tankers, the report noted.
“Uncle Sam might just allow a little bit more of that oil to flow,” Mike Muller, head of Asia at Vitol Group, said Sunday on a podcast produced by Dubai-based Gulf Intelligence. “If the midterms are dominated by the need to get gas prices lower in America, turning a somewhat greater blind eye to the sanctioned barrels flowing out is probably something you might expect to see. US intervention in these flows has always been pretty sparse.”
The US confiscated oil from an Iranian-flagged vessel off Greece last month, which was followed days later by Tehran detaining two Greek tankers in the Persian Gulf. But Washington’s move is unlikely to signal the start of more tanker seizures by the US, according to Muller.
Iran has raised oil exports this year, most of them ending up in China.
A new nuclear deal would lead to an additional 500,000 to 1 million barrels per day coming on to international markets, enough to weigh on prices, according to energy analysts. It also has around 100 million barrels of oil in storage that could be sold down quickly, it added.
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