June 5, 2014 10:53:58 am
With Iran’s controversial nuclear weapons programme, the US President Barack Obama has suspended his action on Iranian oil sanctions for the next six months.
There is, however, enough oil in the international market for countries like India and China to reduce their dependence on Iranian oil, so as to avoid US sanctions as per Congressional Act but Obama determined that there is no need to do so for the next six months as Tehran is fully co-operating with the US-led international community to address their concerns about its nuclear weapons program, the White House said on June 4.
White House Press Secretary, Jay Carney, said, “While market conditions suggest that there is sufficient supply to permit additional reductions in purchases of Iranian oil, the United States has committed to pause efforts to further reduce Iran’s crude oil sales for a six month period under the Joint Plan of Action between the P5+1 and Iran.”
“In return for this and other limited relief measures, Iran has committed to take steps that halt and in key respects roll back progress on its nuclear program. The International Atomic Energy Agency has verified that Iran is complying with these commitments,” he added.
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The analysis contained in the Energy Information Administration’s report of April 24, indicates that global oil consumption has exceeded production in recent months, he said, adding that this resulted in a small withdrawal from global oil stocks, in line with rates earlier this year.
“Global oil supply disruptions in recent months increased compared with earlier this year, but the resulting supply reduction was offset by increased petroleum production, particularly in the United States,” Carney said. The Global surplus crude oil production capacity has increased modestly in recent months but remains lower than a year ago, he noted.
Oil inventories among members of the Organisation for Economic Cooperation and Development are three per cent below year ago levels, he said. The Brent crude oil price remains near USD 110 per barrel, in line with the price level 6 months ago when the last determination was made.
Carney said, “While these factors indicate general market tightness, they also indicate there currently appears to be sufficient supply of non-Iranian oil to permit foreign countries to reduce significantly their purchases of Iranian oil, taking into account current estimates of demand, increased production by countries other than Iran, inventories of crude oil and petroleum products, and available spare production capacity.”
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