Russia is warning that the decision by US President Donald Trump to pull America out of a nuclear agreement with Iran and re-instate sanctions against the country could push oil prices to new highs.
Igor Sechin, the chief executive officer of Russia’s oil giant Rosneft, was quoted by media as saying that the sanctions against Iran – that would include bans on purchases of oil from the country – could cause an inevitable reduction of Iranian barrels in the global supply pool.
Sechin added that the sanctions against Iran could knock at least five percent of global oil production offline.
He warned that new price records might be on the horizon due to Trump’s anti-Iran move particularly now that oil futures were already sliding on expectation of higher Russian and Saudi production – amid signals that the ongoing OPEC and non-OPEC production cut agreement to the tune of 1.8 million barrels per day might be canned, according to a report by the Forbes.
Drivers and industries across Europe and the U.S. will feel the effects of action taken by the White House, as the revoking of the Iran Nuclear deal – “a non-market factor” makes the global oil sector unpredictable, Sechin – widely believed to be close to Russia’s President Vladimir Putin – added.
“I have to say that the US has consistently pursued the policy of non-acceptance of international agreements, which would allow challenging their actions on global platforms. In fact, judicial protection and fair market arbitration are off the table.”
Analysts say they expect world’s biggest buyers to find a way to skirt the sanctions that are to be imposed by the US against purchases of oil from Iran over the next months.
On Wednesday, Senate Democratic Leader Charles Schumer warned that Trump’s decision to pull the US out of Iran nuclear deal could affect America’s consumption market and criticized the president for failing to take a proper action to stop this.
Schumer criticized Trump over the withdrawal from the nuclear agreement and exhorted the president to “stand up to OPEC” over the price issue.
“It’s time for this president to stand up to OPEC,” he said.
“He’s palling around with the Saudis and the UAE and all these other oil-rich countries. Why doesn’t he ask them to lower their prices?” Schumer said, added that Trump “should buck his oil industry buddies.”
Schumer said that gasoline prices had jumped 25 percent since Trump took office in January 2017 and blamed his policies – specifically those concerning the Middle East and Iran – for this.