Iran's oil sanctions is a trap for major oil producers; oil analyst
"Iran's oil sanctions is a trap that United States has lunch for the major oil producers such as Saudi Arabia and United Arab Emirates," an oil analyst told ILNA in an interview.
Referring to the US reimposed sanctions on Iran's energy, Abdul Samad Rahmati believes that in the new conditions, political interests have dominated US economic welfares and this is not a good sign
He added that removing about 1.3 million barrels of Iranian oil, along with reduction in oil production in Venezuela and Libya will have negative effect on the oil market over the long term.
Abdol Samad Rahmati stressed that oil price may be increase to 75$ per barrel and now must to see that major buyers like China and India will be satisfied with the new conditions or not.
Oil prices inched up on Tuesday amid supply cuts by producer club OPEC and Russia, although the darkening economic outlook capped gains.
"In spite of the extra capacity, Saudi Arabia oil output has declined but it may edge up in June. The extra crude may be used for domestic power generation rather than providing the boost to exports that Washington has been seeking," Abdol Samad Rahmati said.
An oil analyst told that Riyadh often lifts output in the hot summer months to fuel oil-fired power plants and meet rising electricity demand, which means exports do not necessarily rise.
He added that the UAE also does not have much capacity to replace Iran's oil because it produces about 3 million barrels a day. About one million is spent on domestic needs and the rest will be exported to the world market.
The White House said waivers for China, India, Japan, South Korea and Turkey would expire in May, after which they could face US sanctions themselves.
This decision is intended to bring Iran's oil exports to zero, denying the government its main source of revenue. Iran insisted the sanctions were illegal and that it had attached "no value or credibility" to the waivers.
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