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Why Oil Traders Are Stockpiling Crude

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US Slaps Sanctions On Iranian Central Bank—What’s Next?

Tehran

The United States on Friday has taken the first step in its response to the attacks on Saudi oil infrastructure by imposing more sanctions on Iran, but the response might not stop there.

The latest round of sanctions targets the Central Bank of Iran, the National Development Fund of Iran, and Etemad Tejarate Pars Co, which the United States alleges has hidden money transfers that have been used to purchase military equipment, according to a Friday statement by the U.S. Treasury Department.

The sanctions add to the already crippling sanctions on the Middle Eastern country that has stripped Iran of its oil income by drying up most of its buyers, “denying Iran the wealth to create their terror campaign around the world,” US Secretary of State Mike Pompeo said in August.

 “Attacking other nations and disrupting the global economy has a price. The regime must be held accountable through diplomatic isolation and economic pressure.” Pompeo said over Twitter on Friday.

But diplomatic isolation and economic pressure are not the only responses that the United States is considering. Pentagon officials, sources say as reported by Foreignpolicy.com, are expected to present President Donald Trump with military options in a Friday meeting, as there hasn’t been a consensus so far about just how far the United States should go in its response to Iran.

Sources have said that some of the options being recommended are covert in nature, and likely include a cyberattack or some form of electronic warfare, followed by diplomatic efforts that could take place at the UN General assembly next week, a senior official has said. The Pentagon officials’ recommendations are thought to be more measured than options the State Department favors, such as a strike or more boots on the ground in the Middle East.

By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on September 21 2019 said:
    US sanctions on Iran have so far failed to adversely affect Iran’s oil exports with China for one reported to have raised its imports of Iranian crude from 690,000 barrels a day (b/d) to 1.2 million barrels a day (mbd) in August. Therefore, imposing sanctions on Iran’s Central Bank will not fare better.

    The United States has no shred of evidence that Iran was behind the attack on Aramco’s oil infrastructure. Moreover, it realizes that even a small symbolic strike against Iran will mean war and this will mean in broader terms the end of US national interests in the whole Middle East. It could also mean the destruction of Saudi major oil facilities and the risk that thousands of US troops inside the US Embassy in Baghdad and in Deir ez-Zur in Syria could be taken hostages or killed. In addition, US naval assets including Aircraft Carries could be within range of Iranian missiles.

    As a result, oil prices could surge to $140 a barrel impacting adversely on the US economy and costing President Trump the 2020 presidential elections.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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