United States' attempts to drive Iranian oil exports down to zero come against the backdrop of a global market that is sufficiently well supplied to avoid price disruptions, senior US officials said on Thursday.
“There's roughly a million barrels per day (bpd) of Iranian crude (exports) left, and there is plenty of supply in the market to ease that transition and maintain stable prices,” said Brian Hook, US Special Representative for Iran and Senior Policy Advisor to the Secretary of State, speaking in a call with reporters.
The comments came three days after the US demanded importers halt oil purchases from Tehran from May or face punitive action.
Despite the suggestion of plentiful supply, the tightening of sanctions pushed global oil price benchmarks Brent and West Texas Intermediate (WTI) to their highest levels this year. The Middle East benchmark Dubai even jumped to its highest in more than five years.
Still, “the price situation is well in hand,” said Assistant Secretary of State for Energy Resources Frank Fannon, speaking during the same call. “Now is the right time to go to zero” Iranian oil exports, Fannon said, adding the market was “well supplied”.
US President Donald Trump has expressed confidence that Saudi Arabia and the United Arab Emirates would compensate for the shortfall in the oil market.