Role of other suppliers
The United States is confident that the end of its waivers on imports of Iranian oil won’t disrupt the world’s oil supply. In a press statement announcing the end of exceptions to imports of Iranian oil, the US government said, “We have had extensive and productive discussions with Saudi Arabia, the United Arab Emirates, and other major producers to ease this transition and ensure sufficient supply. This, in addition to increasing U.S. production, underscores our confidence that energy markets will remain well supplied.”
Let’s see how other producers, as well as the countries that received waivers for Iranian oil imports, reacted to the end of the waiver program.
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Saudi Arabia, the largest OPEC oil producer, said that it would decide whether and how much to boost oil production based on demand in May and June. The country intends to fulfill any supply gap in coordination and discussion with other OPEC members.
China and India
According to a Reuters report, India plans to make up for the loss of Iranian oil following the end of waivers by importing additional oil from other suppliers. According to the report, India’s imports from Iran have roughly halved since November, when the United States imposed the sanctions.
China disapproves of the US sanctions on Iran. China’s Foreign Ministry Spokesperson Geng Shuang said, “Here I’d like to repeat my answer that China firmly opposes the unilateral sanctions and so-called “long-arm jurisdictions” imposed by the US.”
WTI (West Texas Intermediate) near-month futures oil prices (USO) rose to $66.3 per barrel on April 23 but fell back to $63.5 per barrel on April 29. While the ending of the waiver program for Iranian oil imports may bring short-term volatility to oil prices, the impact in the longer term may not be significant. ExxonMobil (XOM), Chevron (CVX), BP (BP), and Royal Dutch Shell (RDS.A) are among the top global oil companies that stand to be affected.