As we head towards Iran oil sanctions and mid-term elections next week, we are focused on the following 4 topics
The second round sanctions by the U.S. on Iran will take effect in November. These sanctions will focus on Iran’s energy sector. The Trump administration forecasts that it will persuade the countries that import Iranian oil to cut as much as 1 million barrels a day when the sanctions begin in early November. The major importers of Iranian oil (China, India, South Korea and Japan) are all situated in Southeast Asia and are allies with the United States.
News was released this week announcing that the U.S. would be reinstating sanctions against Iran, specifically the Iranian government’s purchase of United States Currency (Dollar), Tehran’s trade in gold, other precious metals, and its automotive industry. President Trump stated as well that if Iran didn’t comply with the reinstatement of the first wave of sanctions that his administration would look into targeting Iran’s port industry as well as its energy shipping and ship building industries. These second wave of sanctions could ultimately have an impact on global supply as well as the worlds spare capacity cushion of oil. Sanctions against Iranian Oil will impact another player in the trade war against the U.S., China. China is the biggest buyer of Iranian crude oil and with Trump and his administration exchanging tariff blows back and forth it will be a test of time to see how long China will resist communicating with President Trump and the United States.