Washington — The US aims to take more Iranian oil exports off the market without increasing prices, top State Department official Brian Hook said Monday, adding that higher production from the US, Saudi Arabia, Russia and Iraq has "more than covered the gap" in supply created by returning Iran sanctions.
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US sanctions against Iran's oil buyers went back into force Monday. Eight countries will be allowed to keep importing from Tehran in exchange for making cuts in the past six months and promising to cut further in the next six months.
Comments by Hook and Secretary of State Mike Pompeo show that the administration of President Donald Trump has been keeping a close eye on oil prices, which spiked in early October in part because of its expected hard-line sanctions enforcement.
Front-month ICE Brent crude closed at $72.83/b Friday after eight waivers were announced, down $2.02/b from May 8, when Trump announced the US would exit the Iran nuclear deal and reimpose oil sanctions. Oil futures were trading higher Monday morning, around $74/b.
Concerns about a potential fourth-quarter supply shortage as a result of the sanctions were a key factor in Brent's rise to $86.29/b on October 3.
"We will ensure that as more barrels of Iranian crude and condensate come off the market, that we accomplish our national security objectives without increasing the price of oil," Hook, head of the State Department's Iran action group, told reporters on a conference call. "We have a high degree of confidence that we will be able to do both."
Hook said the administration is confident oil production will continue to rise elsewhere to allow further cuts to Iran's exports.
"We are highly confident that we will be able to substitute Iranian crude for other crude," Hook said. "Oil producers have all increased their production -- the United States, Iraq, Saudi, Russia. We have more than covered the gap. And as more barrels of Iranian crude come off the market, we will be finding alternatives for nations."
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