After yesterday's announcement by the US government to sanction the purchase of Iranian oil from 1 May, the oil price reached its highest level since November 2018. After the imminent sanctions became known, the protests of the affected countries quickly took place.
From 1 May US Sanctions against buyers of Iranian Oil
he declared aim of the US measures is to completely stop Iran's oil exports. As buyer countries, China, South Korea, India, Japan, Turkey, Greece and Italy would be threatened by US sanctions as of next month if they did not completely stop importing Iranian oil. While not all affected countries immediately took a stand on the planned US sanctions, China, the largest buyer of Iranian oil, has already made a formal protest. As the world's second largest economic player, the country could be hit particularly hard by possible sanctions. Another interesting question is how the US action could affect the already existing trade conflict between the two countries.
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Unlike China, South Korea seeks dialogue with the US government. It became known from the environment of the government that a delegation is to be sent to Washington in the near future. The aim of this delegation is to obtain an extension of the special permit to import oil from Iran. The consistent choice of words by the American side, however, leaves at least some doubt about the possible success of the negotiations.
Meanwhile, Iranian Oil Minister Bijan Sanganesh accused the US of using the current difficult situation on the oil market as a political weapon against the country. Saudi Arabia, on the other hand, as one of Iran's biggest opponents in the Middle East, welcomed the US plans. The country's foreign minister said it is a necessary step against Iran's destabilizing policies.
Today the oil price reaches $74.61 per barrel, the highest level since November last year, due to the current developments. While Saudi Arabia's announcement that it would raise its production rate to compensate for the possible loss of Iran's production, initially reassured the market and caused the price of a barrel of Brent oil to drop close to $74, it rose again shortly thereafter to the current level of USD 74.40.
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