The long-awaited sanctions against Iranian oil exports took effect earlier this week on Tuesday, a month after US President Donald Trump announced that he would be withdrawing from the 2015 nuclear deal. The new sanctions have loomed over the oil industry since their announcement, as many experts disagreed on the market ramifications.
Although the White House had initially claimed that no states would be permitted to purchase Iranian crude, according to a report from Reuters, both India and China have received reprieves from the Trump administration and will continue to import the Gulf state’s oil. Six other countries — “South Korea, Japan, Italy, Greece, Taiwan, and Turkey” — are also being permitted to continue to buy Iran’s oil. Still, the US is optimistic that the sanctions are putting the pressure on Tehran that Washington is hoping for. However, the White House also claims that talks with the remaining eight governments are still in progress, according to Market Watch.
“More than 20 importing nations have zeroed out their imports of crude oil already, taking more than 1 million barrels of crude per day off the market,” said US Secretary of State Mike Pompeo while speaking to reporters, according to Reuters. “The regime to date since May has lost over $2.5 billion in oil revenue.”
As the sanctions began, the price of crude oil fell slightly. According to a report from CNBC, the penalties had a relatively small effect on prices, which have been declining as supply worries subside. At the time of this writing, Brent crude, considered to be a “benchmark fuel” is trading at close to $73 per barrel.