Ben Luckock, head of oil trading at Trafigura Group, has identified U.S. foreign policy towards Iran as the most significant factor that could drive crude prices higher in a market that is otherwise well-supplied. In an interview with Bloomberg TV, Luckock highlighted two major uncertainties: how the U.S. will handle its trade issues with China and its approach to Iran. He emphasized that the situation with Iran is particularly crucial. “The pressure on Iran could push it into a corner, and we need to be cautious,” he said.
Two weeks ago, the U.S. imposed its first sanctions against Iran, targeting three vessels transporting Iranian crude to China. The sanctions affected one very-large crude carrier (VLCC) and two Aframaxes, which the U.S. Treasury Department said were involved in moving Iranian oil to China. These measures also targeted several individuals and entities across various countries linked to Iran’s Armed Forces General Staff and its sanctioned front company, Sepehr Energy Jahan Nama Pars.
On Tuesday, the Trump administration expanded its sanctions, adding over 30 people and vessels to the list for selling and transporting Iranian petroleum products as part of Iran’s “shadow fleet.” The latest sanctions affect tanker operators in India and China, oil brokers in the UAE and Hong Kong, and the head of Iran’s National Iranian Oil Company.
Last year, President Trump promised to significantly reduce Iranian oil exports, tying it to trade. He warned that countries like China, which continued to buy oil from Iran, would face tariffs on their goods in the U.S. of 100% or more. China has been importing Iranian oil through indirect methods, using a network of aging tankers that often lack identifiable insurers. These transfers involve significant risks, including potential spills and collisions, especially with many low-quality vessels in congested trade routes and their transponders turned off.
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