US zero exports target impossible in tight market

A senior Iranian oil official says the United States will fail to drive Iranian oil exports down to zero as the market is already tight and rival producers are not able to make up the shortfall.

Iran’s OPEC governor, Hossein Kazempour Ardebili, told Reuters on Friday that a “supply shortage” showed that Washington would not be able to meet its zero exports target.

“There is no spare capacity anywhere,” he added.

The US administration of President Donald Trump is seeking to cut Iran’s oil exports completely by November 4 as it re-imposes sanctions on Tehran.

It is also encouraging other oil producers such as Saudi Arabia, Russia and other member states of the Organization of the Petroleum Exporting Countries (OPEC) to pump more to meet the shortfall.

An expected loss of Iranian oil, declining supply from another OPEC member, Venezuela, and other outages are boosting crude prices, which this week hit $80 a barrel, the highest since May.

Under the US pressure to lower oil prices, the OPEC and its allies agreed in June to boost production, having participated in a supply-cutting deal in place since 2017.

Despite an increase in OPEC production since then, Saudi Arabia has added less crude than it initially announced.

The Iranian OPEC governor has voiced skepticism that other producers can add much more oil.

Back in August, Kazempour Ardebili said the US president has apparently been duped by Saudi Arabia into believing that the kingdom can replace Iranian barrels cut from the market.

Iran says US President Donald Trump has apparently been duped by Saudi Arabia into believing that the kingdom can replace Iranian barrels cut from the market.

“It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran,” he added.

The White House has announced that Saudi Arabia’s King Salman had promised Trump to raise oil production and that the kingdom had two million barrels per day of spare capacity to boost output to offset a decline in supply from Iran.