London, 12 July – Oil refineries in Asia are now seeking alternatives to Iranian oil from the other Middle Eastern oil-producing countries following the US’s announcement that they would be renewing sanctions on Iran and not issuing waivers, according to Kuwait Petroleum Corp (KPC) Chief Executive Officer Nizar al-Adsani.
Al-Adsani, who spoke to Reuters at an event in Beijing on Monday, said that KPC has increased its output by 85,000 barrels per day (bpd) in order to meet its commitment in an agreement by the Organization of the Petroleum Exporting Countries (OPEC), which also includes Saudi Arabia, the United Arab Emirates and Iraq, but that output may rise again if OPEC agrees.
He said: “There is a demand now … as sanctions are implemented on Iran … Some of the companies are trying to find other options other than Iran, be it the kingdom (Saudi Arabia), Emirates, Iraq or Kuwait.”
Kuwait’s Oil Minister Bakheet al-Rashidi said that he did not anticipate any further OPEC meetings on oil output before December.
He said: “The market is stable enough, we’ll be producing more than enough to stabilize (the oil) market.”
These comments come after a meeting last month, during which OPEC members and non-OPEC members (i.e. Russia) agreed to increase their oil exports by roughly 1 million bpd from July to make up for the shortfall caused by sanctions on Iran.
This increased production, which is encouraged by the US, China, and India, will prevent an oil deficit and climbing oil prices.
Why is the US putting sanctions on Iran’s oil exports?
When the US pulled out of the 2015 nuclear deal, otherwise known as the Joint Comprehensive Plan of Action (JCPOA), on May 8, Donald Trump promised to reinstate Obama-era sanctions on Iran, including on their oil.
This was designed to put financial pressure on Iran, whose economy is already crumbling due to years of corruption and mismanagement, in order to bring them back to the negotiating table for a better deal or bring the mullahs to their knees so that the Iranian people could rise up and end the Ruling System that they hate.
That is why Trump has already been levelling new non-nuclear sanctions against Iran for things like human rights abuses and support of terrorism.
The US’s actions are already encouraging the Iranian people’s uprising, which has been going on since December, but has peaked in recent weeks. So if the US keeps up the sanctions and if other countries come on board, as many Gulf countries have promised to, then we could soon see a new non-nuclear Iran.