Oil Prices Rise with Middle East Tensions
On May 2nd, the United States’ waiver period that granted eight nations to continue importing Iranian oil without penalty has ended. The countries who granted extensions that ended are China, India, Turkey, Greece, Italy, Japan, South Korea and Taiwan. As of today, only Italy, Taiwan and Greece have halted their purchases of Iranian produced oil. The United States now faces the dilemma of either granting further extensions to the waiver thus backing down from their threats, or risk creating further global tension by sanctioning the countries that continue to do business with Iran.
Global oil prices shot up quickly this week following reports that the Trump administration has decided to let Iranian oil sanctions exemptions expire at the end of the month. By ending sanctions exemptions, the administration has accelerated its goal of forcing Iran’s oil exports to zero. At a Monday press conference, Secretary of State Mike Pompeo clearly laid out the purpose of ending the waivers by stating “We are going to zero. How long we remain there, at zero, depends solely on the Islamic Republic of Iran’s senior leaders. We’ve made our demands very clear to the ayatollah and his cronies.”
The Treasury Department of the United States placed sanctions on Venezuela’s state-owned oil company Petroleos de Venezuela, S.A (PDVSA) on January 28 in an effort to stabilize democratic order to the region and combat corruption in Venezuela.