The Trump administration will likely grant Iranian crude buyers less leeway from sanctions that snap back in November than the Obama administration granted in 2012-15, but an oil price spike would force the White House to ease its enforcement, analysts said.

  • But price spike above $80/b will force White House to rethink
  • ‘Very messy process’ ahead as US weighs exemptions
  • Treasury asks for cuts before sanctions return in November

Iran’s oil customers have until November 4 to wind down their contracts before US sanctions go back into force and block them from the US banking system.  The Treasury Department has said it would consider exemptions for countries that demonstrate significant reductions of Iranian purchases in the next six months, but not all analysts expect the White House to grant any sanctions relief.  Most analysts surveyed by S&P Global Platts predict the sanctions will remove less than 500,000 b/d of oil supply from the global market by the November enforcement deadline, ranging from 100,000-200,000 b/d at the low end and up to 800,000 b/d at the high end. Iran has boosted its oil production nearly 1 million b/d since the nuclear deal lifted Western sanctions in January 2016. It produced 3.83 million b/d in April, according to the latest S&P Global Platts OPEC survey.