May 20, 2016
By Shatha Al Juburi
Despite most of the sanctions imposed on it have been lifted after signing the nuclear deal with US-led 5+1 powers on July 14 2015, Tehran has been in deep self-isolation from the world oil markets. This self-isolation can be attributed to the hostile acts of Iran’s extremists including sending threats to US and its allies and destabilising the region through Iran’s allies in the region like Iraq, Lebanon, Syria and Yemen.
Most potential buyers of Iranian crude oil have declined to buy because banks have stopped funding their purchase from Iran following the new sanctions imposed on Tehran by the US Treasury as punishment for conducting ballistic missile tests.
According to Reuters, Iran’s oil tankers need modernisation and Tehran desperately need foreign ships to export its oil to Europe and elsewhere in order to meet its sale target which has to reach its pre-sanctions levels this year.
Reuters points out that only around 8 million of Iran’s oil have been shipped to European destinations since sanctions on Iran were lifted in January because US restrictions on Tehran have prohibited any trade in dollar with Tehran or any involvement of US firms including banks.
In the meantime, Saudi Deputy Crown Prince and Defence Minister Muhammed Ibn Salam has barred Iran form sailing in Saudi territorial waters in order to slow Iran’s efforts at increasing its oil exports. Reuters quoted an unnamed source as saying, “It has improved a little bit since the lifting of sanctions; but we still face serious problems”. Bahrain has followed the Saudi lead in banning Iranian ships from using its territorial waters.
Iran’s oil exporting market may suffer more losses because of possible US further sanctions to be imposed on Tehran if the latter continues posing threats to the security of US and the region.