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Saudi Arabia Wins Big As Trump Cracks Down On Iran

The White House sent a bullish jolt into oil markets this week with a surprise decision to eliminate their waiver program for key buyers of Iranian crude. To review, the Trump administration had granted free passes to large buyers of sanctioned Iranian oil in order to keep prices in check while OPEC+ is working to tighten supplies. Our strong expectation was that Washington would continue this policy as Trump hates high gasoline prices and the program didn’t hurt him an ounce politically. Nevertheless, Trump’s State Department is ending the waivers in a push to move Iranian exports to zero as soon as possible. Refiners in India and China- Iran’s two largest customers- will be particularly hurt by the move which gave oil a $2 boost and sent short positions running for cover. Brent time spreads rocketed higher suggesting physical traders are particularly bullish on near term market fundamentals as refiners scramble for spot barrels.

We were surprised by the White House’s move as it clears a very easy path to the higher gasoline prices that President Trump loathes. Trump’s team obviously considered this prior to the move, however, and comments from the US State Department and Saudi leadership on Monday insisted a new cooperation between the two nations will keep oil prices in check. Trump himself apparently feels confident oil prices will stay under control Tweeting “Saudi Arabia and others in OPEC will more than make up the Oil Flow…




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