Oil in Global Economy Series: Iran claims Saudi Arabia will fail to compensate for Iranian crude supplies

Speaking to reporters, Iranian oil minister suggested that Saudi Arabia’s assurance to the U.S. President Donald Trump that the Kingdom would compensate for a decline in oil supplies from Iran in the face of U.S. sanctions on Iran, part of which went live in August targeting Iran’s access to the USD and the rest of which is to go live by November end specifically targeting Iran’s oil exports and banking sector, is nothing but an eye-wash and a political assurance to president Trump as it is far from reality. Iranian oil minister Bijan Zanganeh said on Monday, “(Mohammed) bin Salman's remarks and such bragging can only satisfy (US President Donald) Trump. No one else will believe him. Iran's oil cannot be replaced by Saudi Arabia nor any other country".

According to him, Saudi Arabia’s suggestion that it has a spare capacity of 2 million barrels per day is an outright lie and the recent increase in oil supplies from Saudi Arabia is not actually due to an increase in production but came from replenishing the oil stocks.

To bring Iran to the negotiating table to forge a new agreement over its nuclear ambition, Washington has been imposing these sanctions since August, after President Trump moved Iran out of the Joint Comprehensive Plan of Action (JCPoA), better known as the Iran nuclear agreement that was reached between Iran and six global powers (Russia, China, United Kingdom, France, and Germany) back in 2015. Washington has been pressing countries like India, China, and other allies to cut back on Iran’s oil exports to zero.

But the minister suggested that Washington would fail to achieve the goal as high global demand for oil would keep Iranian exports covered. Despite the minister’s comments, several surveys suggest declining oil exports heading to November sanctions.