Global oil prices surged to nearly six month higher at US$74 a barrel after President Donald Trump decided not to reissue waivers for all countries that continue to import Iranian oil without facing United States sanctions - Photo by White House

JAKARTA (TheInsiderStories) – Global oil prices surged to nearly six month higher at US$74 a barrel after President Donald Trump decided not to reissue waivers for all countries that continue to import Iranian oil without facing United States sanctions. The policy will be implemented in early May.

In an official statement released on Monday, White House also stated will supporting allies and partners to switch from Iranian crude to other alternatives. It said, this move aims to bring Iran’ oil exports to zero, denying the regime its principal source of revenue.

Furthermore, Trump said, US, Saudi Arabia, and the United Arab Emirates, three of the world’ great energy producers, are working to ensure global oil markets remain well supplied. America and its partners will take immediate action to ensure that supplies are made available to replace all Iranian oil removed from the market, Trump said.

But he assured, that US to maintain the global oil market supplied in good condition. US’ Secretary of State Michael Pompeo also ensured it will increase US production to keep supply to the global energy market.

“We will zero – go to zero across the board. We will continue to impose sanctions and monitor compliance. Any nation or entity that interacts with Iran must do its diligence and make mistakes. The risk will not be worth the benefit,” he said.

In 2018, crude oil production increased by 1.6 million barrels per day above the 2017 level. And the US Energy Information Agency projects an increase of 1.5 million additional barrels per day in 2019 calendar year.

“We will continue to apply maximum pressure on the Iranian regime until its leaders change their destructive behaviour, respect the rights of the Iranian people, and return to the negotiating table,” said Pompeo.

He revealed, after withdrawing from the Iranian nuclear deal last year, President Trump implemented the strongest campaign of pressure in history against the Islamic Republic of Iran. The aim is to eliminate the regime of funds that it has used to destabilize the Middle East for four decades, and provide incentives for Iran to behave like a normal country.

Before sanctions were imposed, Pompeo explained, Iran generates as much as $50 billion annually in oil revenues. But with the sanctions, it is estimated to have cut $10 billion from Iranian revenues.

The money is used by the Iranian regime to support terror groups such as Hamas and Hizballah and continue the development of its missiles which are in conflict with United Nation Security Council Resolution 2231, and that will perpetuate the humanitarian crisis in Yemen.

“We have made our demands very clear to the Ayatollah and his cronies. End your pursuit of nuclear weapons. Stop testing and multiply ballistic missiles. Stop sponsoring and carrying out terrorism. Stop the arbitrary detention of US citizens,” he said.

The termination of this exception will hit Iran‘ biggest oil customers, China and India, both of which have lobbied for extensions to sanctions. Similarly, South Korea is the main buyer of Iranian condensate, the form of ultra-light crude oil that the refining industry has relied on to produce petrochemicals.

So that, Iran expressed its readiness for the US decision to end the waivers given to buyers of Iranian crude and the Revolutionary Guards repeated threats to close the strategic Strait of Hormuz if Tehran was banned from using it.

In addition, Iran has threatened to disrupt oil shipments through the Strait of Hormuz, the main oil shipping channel in the Gulf, if the US tries to strangle Tehran’s economy by stopping its oil exports.

Meanwhile, India hopes the US will allow its allies to continue buying some Iranian oil instead of stopping purchases altogether since May. The country is Iran’ biggest oil client after China, almost halving Iran’ oil purchases since November.

Yesterday, Brent crude rose 2.5 percent in early Asian trade to $74.0 per barrel, the highest since November. While, US markers West Texas Intermediate rose as much as 1.2 percent to a high of $64.74 in two weeks. The market also watched closely for further losses from the turmoil in Venezuela and Libya.

Written  by Daniel Deha, Email: daniel@theinsiderstories.com