The goal of U.S. and European sanctions on Iran is to crush the rogue regime’s economy and reduce its oil exports. European nations have already slashed their purchases of Iranian crude, and other big importers like Japan are gradually following suit ahead of a June deadline.
Yesterday the Obama administration secured promises from Saudi Arabia to ramp up its own oil output to make up for Iranian barrels kept off the market. And this morning came a report that Washington was in discussions with the United Kingdom on a plan to tap strategic reserves.
Yet those actions (plus oil’s roughly $20 per barrel insecurity premium) are in expectation of sanctions preventing a meaningful fraction of Iranian oil from getting to market.
But what if Iranian oil still manages to find its way to eager buyers who simply reduce their own imports of say, Saudi oil, in order to buy more heavily discounted Iranian crude?
That’s the question that is emerging now in regards to India. Instead of scaring India off Iran’s oil, so far it appears that U.S. sanctions are only having the effect of bringing India and Iran closer together. Read more.....