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17th of July 2018

International



Hassan Rouhani calls Trump plan to end Iranian oil exports ‘a baseless fantasy’

The battle of wills between Tehran and the Trump administration escalated Tuesday as Iranian President Hassan Rouhani dismissed a U.S. drive to completely cut off his country’s oil exports a “baseless fantasy” as he lobbied European nations to stick with the 2015 nuclear deal that President Trump has abandoned.

The U.S. government this week announced an unexpectedly aggressive campaign to try to shut down Iran’s most critical export, saying it wanted all of Iran’s energy customers to find new suppliers by November. Saudi Arabia has said it can try to fill the gap, but some traders doubt all of Iran’s exports can be replaced easily.

“The United States will never be able to cut Iran’s oil revenues,” Mr. Rouhani told a news conference in Switzerland, adding what some took to be a veiled threat that Tehran has the ability to block other oil exporters in the region if its oil exports were blocked.

“It is incorrect and unwise to imagine that some day all producer countries will be able to export their surplus oil and Iran will not be able to export its oil,” he said.

The developments of recent days helped send oil prices surging again on Tuesday, with U.S. light crude at one point topping $75 a barrel for the first time in more than three years.

Top industry analysts at Morgan Stanley also weighed in, forecasting that oil prices will rise more than previously expected during the second half of 2018 to $85 a barrel — $7.50 higher than previously predicted.

U.S. officials say they are confident global oil supplies are robust enough to replace Iranian output. President Trump has ratcheted up pressure on OPEC and the Saudis, the world’s largest oil exporter, to boost production.

Over the weekend, Saudi Arabia’s King Salman promised Mr. Trump that he could raise production if needed, the White House said.

Iran is OPEC’s third-largest producer, exporting about 2 million barrels of crude oil per day.

The fate of the 2015 nuclear accord, negotiated by the Obama administration to curb Iran’s nuclear programs in exchange for a lifting of strong international economic sanctions, is hanging in the balance after Mr. Trump took the U.S. out of the pact. The other signatories, including leading European powers, China and Russia are weighing whether the accord can be salvaged if the U.S. reimposes its own sanctions on Tehran.

The U.S. has clearly warned of consequences for companies and countries that continue doing business with Iran. The threats have frustrated both U.S. friends and enemies, especially with regard to Iran’s oil industry — upon which China, India, South Korea and Turkey all rely.

U.S. officials were making no apologies this week for the hard line they have taken, for the list of demands Secretary of State Mike Pompeo presented to Iran to end its foreign policy adventurism, hostility to Israel and support for proxy groups abroad fighting the U.S. and its allies.

“Our focus is on getting as many countries importing Iranian crude down to zero as soon as possible,” Brian Hook, the State Department’s director of policy planning, told reporters on Monday. “We are also working with oil market participants, including producers and consumers, to ensure market stability.”

On Tuesday, while visiting Switzerland to talk about saving the nuclear deal, Mr. Rouhani dismissed Washington’s drive to crush Iranian oil production and said Iran would remain in the deal only if the remaining partners made it worthwhile for the Iranian economy.

“These are exaggerated statements that can never be implemented,” he told reporters in Bern. “Such a scenario would mean the U.S. was imposing its imperialist policy in flagrant violation of international law.”

Several dozen companies, including major oil firms, have already canceled negotiations or killed deals signed with Iran in the wake of the 2015 accord because of the threat of losing access to the much larger U.S. market and financial system. But the deal signatories insisted the pact can survive.

China’s top diplomat on Tuesday sided with Tehran.

“China is always opposed to unilateral sanctions and long-arm jurisdiction,” Foreign Ministry spokesman Lu Kang told reporters Tuesday, adding that “China and Iran are friendly countries.”

⦁ This article was based in part on wire service reports.

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