Iranian oil exports are set to drop off very soon, Special Representative for Iran Brian Hook said at a press briefing on Thursday.
The ‘maximum pressure’ campaign of the U.S. is going after the money, as 80 percent of Iran’s revenue comes from oil exports, Hook said.
“We have taken over 1 million bpd off Iran’s export list and many more barrels will be coming off very soon,” the diplomat said at a briefing to describe how Iran is funding and arming proxy groups in the Middle East.
The U.S. is doing everything it can to deter and discover sanctions evasion, Hook said, referring to tracking down illegal missile and oil export shipments.
“All of our diplomatic posts in the region, especially in the Middle East and in Europe are putting in place strategies to detect and prevent sanction evasion,” Hook noted.
For months, the United States had said that it was aiming to drive Iran’s oil exports down to zero, and the oil market started to fear in the summer that a steep decline in Iranian oil barrels would tighten the global market too much. OPEC and Russia moved in to reverse the production cuts and compensate for what was expected to be a significant loss of Iranian oil supply. But after imposing the sanctions on Iran’s oil on November 5, United States granted waivers to eight Iranian oil customers—including the biggest buyers China and India—due to the specific countries’ circumstances and to ensure a well-supplied oil market, as U.S. Secretary of State Mike Pompeo said.
Earlier fears of not enough supply turned into fears of an oversupply which, coupled with signs of slowing demand amid high prices, drove the price of oil down by 25 percent from the October peak, when prices hit a four-year high.
According to S&P Global Platts trade flow tracking data, Iranian crude oil exports in November are below 800,000 bpd so far, compared with a six-month average of 2.4 million bpd earlier this year. Due to more Iranian ships switching off transponders, Platts Analytics expects Iranian exports to be more in the region of 1.1 million bpd for November, the month for which buyers had not rushed to purchase from Iran due to the lack of clarity on U.S. waivers before the sanctions snapped back.