Tehran is facing the loss of most of its energy export markets, as Trump’s administration prepares to impose sanctions against Iran’s crude industry from November 4. The move is widely expected to have an immediate impact on Iran, although estimates of exactly how much of the country’s oil could disappear vary widely.
Some energy market analysts expect around 500,000 barrels per day to disappear once U.S. sanctions against Iran take effect, while others have warned as much as 2 mb/d could come offline over the coming weeks.
Washington has also ratcheted up the pressure on global buyers of Iranian crude by demanding they completely cut-off the Islamic republic. This is thought to be part of a sustained effort to undermine Iran’s crude industry, in a bid to force the country to negotiate a new nuclear agreement.
However, the U.S. has since said it could consider exemptions for countries that have already shown efforts to reduce their imports of Iranian oil.
“Both global oil demand and supply are now close to new, historically significant peaks at 100 million barrels per day, and neither show signs of ceasing to grow any time soon,” the IEA said.
“The drivers of demand remain very powerful, with petrochemicals being a major factor,” the group added.