Jakóbik: Trump did not listen to me, and maybe it is better

President Donald Trump did not listen to me and he is not going to lift the sanctions imposed against Iran, on the contrary he wants to tighten them. This is a bad news for potential customers who would like to buy Iranian oil in Poland. However, it can end up with oil prices decline – writes Wojciech Jakóbik editor-in-chief of BiznesAlert.pl.

US is not gonna exclude from Anti-Iranian sanctions eight countries, which have had special treatment since autumn 2018 – The White House informed on Monday. Secretary of State Mike Pompeo made it clear that non-call period cannot be expected.

It refers to Japan, South Korea, Turkey, China, India, Italy, Greece and Taiwan. They imported the Iranian oil, taking advantage that they were not covered by sanctions regime. I even suggested that also Poland could have been excluded from sanctions what would have given a chance to our importers such as Lotos Group or PKN Orlen to boost diversification of supplies and reduce the import of Urals heavy crude from Russia, thanks to special mix coming from Iran.

Nevertheless, the sanctions regime will be tightened, what means that it will be even more tough for Iran to release oil on the market.

The US informs that a possible shortage will be supplemented by increased supply from Saudi Arabia and the United Arab Emirates. Trump wrote on Twitter that OPEC countries will be compensated the decrease of Iranian oil supplies “with interest”.

That would be a real dynamite exploding the oil agreement which is already bursting at the seams. It assumes a coordinated reduction of production by 1.2 million barrels a day to raise oil prices. If, according to Trump’s declaration, the largest OPEC producer – Saudi Arabia, and another important player – UAE – will now increase supply quickly, the agreement may break down and the price of oil will fall quickly. The Russians estimate that it could reach the level of $ 40 a barrel in the hope that it will stop the shale revolution in the US. Apparently, Trump is not afraid of this scenario. In fact some American oil companies are able to go beyond the limit of profitability even to around $ 30.

It turns out, therefore, that given the fact that oil prices have an impact on Poland’s economic growth – perhaps it is good that Trump did not listen to me and intends to tighten sanctions against Iran. This is of course a journalistic take. Looking at the situation analytically, the US policy is putting Iran in the hands of China and Russia, hindering the diversification of oil supplies in Europe and dividing the transatlantic community. The biggest advocates of maintaining a nuclear agreement with Iran and abolishing sanctions are France, Germany and the United Kingdom.