USA aims to reduce Iran’s oil revenue to zero

The warning followed a barrage of more than 60 tweets over the past seven years in which Mr Trump blasted the organisation.

Iran will allow private companies to export crude oil, part of a strategy to counter USA sanctions, and is urging fellow OPEC members, including regional rival Saudi Arabia, not to break output agreements, state media and officials said on Sunday.

Oil has been leaning to the bullish side this week after dipping from the weekend's headlines that Trump has encouraged Saudi Arabia to increase their production to make up for market shortfalls from Iran and Venezuela.

The Saudi Cabinet "affirmed the Kingdom's readiness to use its spare capacity when needed to deal with any future changes in oil supply and demand rates, in co-ordination with other producing countries", according to a report by the Saudi Press Agency.

The fall came as the Russian Energy Ministry said on Monday that the country's oil output increased to 11.06 million barrels per day in June from 10.97 million barrels per day in May. Mr Trump's rhetoric may well be shaped by the upcoming midterm elections in November and the spike in U.S. gasoline prices.

On May 8, President Donald Trump officially withdrew the US from the UN-endorsed nuclear agreement and threatened Iran with worst sanctions.

"This is especially concerning as mid-term elections will be around the same time as the sanctions are reinstated in November".

And he confirmed that United States secondary sanctions on firms dealing with Iran would "snap back" on August 6 for trade in cars and metals and on November 4 for oil and banking transactions.

"We're not granting waivers", the official said.

Mr Trump took another swing at his European allies saying they dealt unfairly with the United States over trade. The organisation has been a punching bag for USA politicians since 1973. He also said he and senior Treasury Department would visit Gulf states "in the coming days".

Matthew Smith, the director of commodity research at ClipperData, told UPI that oil prices so far this week are moving on one hand on OPEC pledges of more production, but correcting later on fears of supply-side strains. Something that is lacking in Mr Trump's rhetoric, she said.

Some key countries are reliant on Iranian oil imports, including India and Turkey.

"Recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy", USA bank JPMorgan said.

  • Wendy Palmer