At a time when the United States is cancelling Iran’s crude oil export exemption, many European countries have jointly issued a strongly worded statement vowing to continue to push for legitimate trade with Iran.
May 4, the European Union High Representative, French Foreign minister, German Foreign Minister and British Foreign Minister on the Comprehensive Agreement on the Iranian nuclear issue joint statement, said that the Iran nuclear deal is the key to increase stability and security in the Middle East region, the United States in the withdrawal of the Iraq nuclear deal after the re-implementation of sanctions deeply regret.
In this joint statement, the European Union and other parties declared that the remaining participating States of the Iran nuclear deal are determined to work with third countries interested in supporting the agreement to maintain and maintain Iran’s financial channels and exports: We are determined to work with other European partners to allow the legal trade with Iran to continue, including through the operationalization of the special purpose carrier of “INSTEX”. In this regard, shareholders are committed to significantly increasing their financial contribution to the INSTEX operating budget.
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We encourage all countries, including Russia and China, as participants in the comprehensive Agreement, to do their utmost, through concrete steps, to promote the legitimate trade permitted by the agreement.
Financial blogger ZeroHedge commented that the joint statement could be intended to stabilize the global crude oil market and also suggest that Trump’s decision to re-impose sanctions on Iran’s oil exports could bring a showdown between the United States and its European allies. Damien Courvalin, an analyst at Goldman Sachs, said in the May 6 report that Brent crude was expected to rebound in the near future in light of rising supply risks and improved demand, which in turn led to lower margins in the EU.
Goldman Sachs expects Iran’s crude oil production to be reduced by 900,000 barrels a daily as a result of U.S. sanctions. Brent crude hit 75.33 of dollars/barrels in April 25, a new high since November 2018, amid a sudden tightening of U.S. sanctions exemptions on Iran and other factors.
The price of cloth oil has now receded, but it is still above 70 dollars.
With the US demanding that Europe abandon the Iran nuclear deal, the EU, France, Germany and the UK have set up a special purpose agency aimed at boosting legitimate business deals with Iran.
According to Bloomberg, in Tuesday, representatives of the European Union, France, Germany, the United Kingdom and Iran will meet in Brussels to discuss how to work together to trade with Iran through INSTEX, a special purpose agency set up in Europe.
But media POLITICO said most experts believe it will be difficult to overcome U.S. sanctions because many companies are too scared of Washington’s punishment to maintain business ties with Iran. In April of this year, the White House officially issued a statement saying Trump had decided not to update Iran’s crude oil exemption policy, which expires in May, with the aim of reducing Iran’s crude oil exports to zero. The United States has demanded that all Iranian oil buyers must stop importing by May 1 or face sanctions. The White House aims to cut off the lifeline of Iran’s annual oil revenue of $50 billion to pressure Tehran to limit its nuclear and ballistic missile tests and stop its support for the Assad government in Syria and the Houthi forces in Yemen.