The waiver on Iran sanctions imposed by the U.S. expired early this month.
With the noose tightening over Iran exports, it is reported that not a single ship has set sail from the oil terminals in Iran.
China and India are the chief importers of Iran crude exports. But now that the sanctions are waived, these countries have not risked the ire of the U.S. as yet. However, there are speculations that China and India will be continuing their imports from Iran.
In April, India had bought 400,000 barrels per day from Iran. It had accumulated stocks anticipating the waiver from the U.S.
With the collapse in its oil exports, the economy of Iran is facing a deep turmoil which is adding pressure to the Iranian government. Analysts feel that the country may find further pressure from the U.S. this month.
President Trump has announced that waiver on oil sanctions will not be extended in May. Further, new sanctions have been imposed on metal exports from Iran. This will further tighten the economy. In addition, the country’s Revolutionary Guard Corps has been labeled as a terrorist organization by President Trump.
Export of crude oil has been the chief source of income for Iran and Venezuela. But with the sanctions, both the countries are feeling the crunch on their main source of income.
However, traders do not feel that there will not be any risk of a shortage of crude oil. The oil prices which touched highs of $75.60 in April have come down to $70 per barrel, currently.
Further, the oil supply has come down with the contamination in the Druzhba oil pipeline from Russia.
In this scenario, the OPEC + countries will be gathering in June to have a discussion on crude production and recommendations regarding the crude market. On May 19, a panel of ministers will gather for an initial meeting in Saudi Arabia.