U.S. Sanctions on Venezuela and Iran, Tensions in Libya, have all contributed to the current fragility of the supply and demand balance of the global oil market, Bijan Zanganeh – Irans oil minister told reporters today.
Oil prices have spiked more than 30 percent this year due to supply cuts from OPEC and U.S. sanctions on oil-rich exporting nations Iran and Venezuela, as well as the intensifying conflict in OPEC member Libya.
“Venezuela is in trouble, Russia is also under sanctions, Libya is in turmoil, part of U.S. oil production has stopped, these show the supply-demand balance is very fragile”, said Zanganeh.
“If they decide to increase pressures on Iran, the fragility will increase in an unpredictable way”, he added.
Zanganeh also said that one of the consequences of pressure on Iran was a rise of pump prices in the U.S. and challenged U.S. President Trump to choose whether to increase sanctions on Iran or keep pump prices low in the U.S.
Last November, the U.S. pulled out of a 2015 nuclear deal between Iran and the five members of the UN permanent council, Germany, and the EU. Shortly after they reimposed sanctions on Iran which cut Iranian oil exports by half. President Trump’s goal is to choke Iran’s primary revenue source, forcing them to end their nuclear activities and discontinue their financial support of hard-line militias across the Middle East.
OPEC will meet with their allies in June to decide whether to continue suppressing supply. Their recent supply cuts were aimed squarely at offsetting record oil production in the U.S.