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In a cut above the usual barb-trading between Iran and the United States, President Trump threatened to meet any attack by Iran on “anything American” with “great and overwhelming force,” in a Tuesday afternoon tweet, adding that “in some areas, overwhelming will mean obliteration.”
The threat came as Iranian President Hassan Rouhani lashed out at new sanctions levied yesterday, referring to the White House as “mentally retarded” in a televised address.
President Trump called the Islamic Republic’s statement “ignorant and insulting” as the situation goes from bad to worse after yesterday President Trump signed an order to sanction Iran’s Supreme Leader, after Iran shot down a US drone and attacks on oil tankers near the Strait of Hormuz—a critical shipping lane essential for the transport of oil.
While President Trump on Monday said that the United States would still be open to negotiations despite the drone attacks and attacks on oil tankers, Iran was not receptive to the idea of negotiations, arguing that the US being open to negotiations on one hand and sanctioning its Supreme Leader on the other was incongruous.
This maximum pressure campaign against Iran, combined with market fears that oil flows through the critical Strait of Hormuz could be disrupted has put a floor under prices that have been otherwise pressured downward by a perceived global oil glut despite OPEC’s best efforts to convince the oil market otherwise. The unrest in the Middle East has even overshadowed Venezuela’s continuously declining production—a factor that has up until recently done much to take over a million barrels a day off the oil market.
Oil prices had risen earlier in the day on Tuesday on increased tensions between Iran and the United States in the runup to crude oil inventory data that will be released at 4:30pm EST, already pricing in an expected crude oil draw.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.