President Donald #Trump put Iran back in the penalty box on Tuesday (May 8) - but the impact on the #oil market could be determined by how China responds. #China, a voracious consumer of oil, holds great sway because it's #Iran's biggest customer. Almost one-third of Iranian oil shipments this year have gone to China, according to Genscape.

The #UnitedStates imports no #crude directly from Iran. And there is no guarantee that Iran's major customers will comply with new sanctions. Even close allies in the #EuropeanUnion are signaling frustration with Trump's decision. Beijing could be even less likely to go along. If the new sanctions cause European nations to cut back or even stop buying Iran's oil, it would leave more crude for China to buy, possibly at a discount.


#Commodities #CommodityMarket #CommodityPrices #OilFutures #CrudeOil #CommoditiesTrading #OilIndustry #OilandGas #OilProduction #OilPrices #OilTrading #OilMarket #WTI #JCPOA
China is the big wild card in Trump's Iran decision
http://money.cnn.com/2018/05/08/investing/china-iran-deal-oil-prices/index.html

#Crude rebounded from earlier losses after U.S. President Donald #Trump withdrew from the Iranian nuclear accord and said new sanctions will be imposed on #OPEC’s third-biggest #oil producer. Futures pared losses to 2.4% in New York on Tuesday after earlier dipping more than 4%. Trump characterized the 2015 accord intended to halt #Iran’s quest for atomic weapons as a great 'embarrassment.' Sanctions lifted as part of that deal will be re-imposed after 180 days, according to the U.S. Treasury.

#WestTexasIntermediate oil for June delivery slid $1.67 to settle at $69.06 a barrel on the New York Mercantile Exchange. Total volume traded was about 70 percent above the 100-day average. A measure of oil market volatility climbed to the highest level in a week. #Brent for July settlement dropped $1.32 to end the session at $74.85 on the London-based ICE Futures Europe exchange.


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Oil Rebounds as President Trump Withdraws From Iran Nuclear Deal
http://fortune.com/2018/05/08/oil-prices-trump-iran-nuclear-deal/

#China, alongside #India, are the top two buyers of Iranian #crude #oil. The Chinese Foreign Ministry signaled last Wednesday (May 2) that it wasn't in support of the #US quitting the deal, but stopped short of criticizing any specific country.

The market will find ways to circumvent any sanctions, such as transferring supplies between floating storage, using barter trade, or not using U.S. banks. For instance, Iranian traders have the option of trading in Chinese yuan-denominated crude oil futures on the Shanghai International Energy Exchange - circumventing any restrictions on dollar-denominated trade and U.S. banks. What seems to be certain is that the market will look for ways to trade Iran oil even amid sanctions, particularly as Iranian oil prices are likely to fall and be discounted.


#Commodities #CommodityMarket #CommodityPrices #OilFutures #CrudeOil #CommoditiesTrading #OilIndustry #OilandGas #OilProduction #OilPrices #OilTrading #OilMarket #WTI #JCPOA
No matter what #Trump says on #Iran, China will probably ignore him
https://www.cnbc.com/2018/05/08/china-a-major-iran-oil-importer-would-resist-any-us-sanctions.html

U.S. #oil (and gas) production has been soaring to record heights. Thanks to the fact that U.S. crude oil production efficiency continues to improve, breakeven costs are now as little as $25 per barrel. In fact, higher U.S. #crude production is the key source of global supply that can offset potential supply losses elsewhere. And more drilling activity increases the chances for even more output moving forward. Since the start of the year, the oil rig count has risen 11% to 825, the highest since March 2015.

The Permian basin that now accounts for nearly a third of all U.S. crude, faces infrastructure constraints that are making it more difficult to ship to refineries in West Texas, storage tanks, and/or to the Gulf Coast for export. Still, going forward, the Permian is expected to account for 40-50% of our new crude production and total U.S. output could surpass 12 million b/d by 2020.


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The U.S. Oil Market Is Surging
https://www.forbes.com/sites/judeclemente/2018/05/02/u-s-oil-market-update-early-may-2018/

#Iran's fragile economic recovery is in jeopardy with President Donald #Trump widely expected to scrap an internationally-brokered nuclear deal and re-impose sanctions against the regime. Trump has given the European nations that helped broker the 2015 nuclear deal - which he called "terrible' - until May 12 to change it, but that is looking increasingly unlikely.

Iran has said it won't accept changes to the deal, which saw it reigning in its nuclear ambitions in return for a relaxation of international sanctions that had sorely damaged the oil exporter. Europe has so far failed to convince Trump to save the nuclear agreement, known formally as the Joint Comprehensive Plan of Action (JCPOA).


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Trump looks set to scrap Iran's nuclear deal — and this is where it'll hurt the most
https://www.cnbc.com/2018/05/01/trump-looks-set-to-scrap-irans-nuclear-deal--and-this-is-where-itll-hurt-the-most.html