Published: Sat, May 12, 2018
Finance | By Cynthia Curry

Iranian nuclear issue should be resolved through dialogue and diplomacy

Iranian nuclear issue should be resolved through dialogue and diplomacy

That commitment by the world's largest oil producer may help to temper oil-price increases, but analysts said it is certain to be challenged by Iran and other members of the Organization of the Petroleum Exporting Countries as a violation of the cartel's current limits on oil production.

However, Supreme Leader of the Islamic Revolution in Iran, Imam Sayyed Ali Khamenei said it was illogical that Tehran stays in the deal with other signatories without solid guarantees from the Europeans.

European countries should continue trading with Iran despite President Donald Trump's decision to re-impose sanctions, France's finance minister has said.

"Given the back and forth between China and the United States on trade, Chinese compliance is probably a nonstarter", said Michael Tran, global energy strategist at RBC Capital Markets. Although, major oil producers are now party to a deal - expiring at the end of the year - to cut their output in order to maintain prices, it is likely that oil levels will remain steady.

Analysts had little hope that opposition to the United States action would prevent sanctions from going ahead.

Kloza says the biggest reason prices are up now is that supply and demand are tightening. USA crude production pushed to a fresh all-time high as explorers put the most drilling rigs to work in 3 1/2 years. That's about 1 million barrels a day more than in early 2016.

Several refiners in Asia said on Wednesday they were seeking alternatives to Iranian supplies.

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Oil prices dipped on Friday, easing from multi-year highs in the previous session on hopes that alternative supplies could replace a looming drop in Iranian exports from US sanctions, Reuters reports.

The US government has said that exemptions for those dealing with Iran are possible, although it has not yet given any details about which companies could benefit.

A number of French firms have have signed billion dollar agreements with Iran since the nuclear accord was signed in 2015.

Companies and countries with commercial deals with Iran would have either 90 or 180 days to wind down those activities, depending on the type of products being sanctioned.

In an interview with Le Parisien, the foreign minister said: "We feel that the extraterritoriality of their sanction measures are unacceptable".

US National Security Adviser John Bolton is reported as saying that European companies doing business in Iran will have to stop doing so within six months or face US sanctions.

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