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Oil hits 3-1/2 year high after U.S. quits Iran deal

12 Mai 2018

The sanctions on oil purchases will be the same as under the Obama administration. "The US has systematically forced Iran to turn more towards Russian Federation and China". European Union foreign policy chief Federica Mogherini said pulling out of the Iran nuclear deal was not a decision that could be taken exclusively by the U.S.

Saudi Arabia, the United Arab Emirates, and Israel are supportive of President Trump's decision. Donald Trump launches a scenario that will significantly tighten the oil market in the second half of the year and the next.

Airbus, based in Toulouse, France, is subject to US export restrictions because more than 10 percent of its jet parts originate with USA companies such as United Technologies, Rockwell Collins and General Electric.

Most EU imports from Iran are energy-related - more than 75% is oil and other fuels.

But it too has an interest in a collaborative and diplomatically responsible Iran, since Tehran is believed to have been a source of nuclear know-how to North Korea. Meanwhile, European allies are disheartened that their advice to Trump to remain in the deal has been ignored.

The S&P energy sector .SPNY trimmed earlier losses to trade down 0.1 percent as oil prices also reduced earlier declines. "We're selling off but we're not down that much", said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Trump has vowed to impose tariffs on China in response to the country's trade practices and alleged theft of intellectual property.

She acknowledged that it is uncertain "to what extent we can keep this [nuclear] agreement alive if a giant economic power doesn't join in".

Investors are anxious that renewed sanctions on Iran, a major oil producer, could lead to supply disruptions.

The leaders of the European Union, France, Germany, the United Kingdom, Turkey, Australia, Japan, China and Russian Federation have expressed regret at the USA decision to stop honoring the agreement.

Putin has long advocated for a new financial system with China that would circumvent the reach of USA sanctions, which also target his country.

The price of gas is nowhere near $4 a gallon like in 2008 or even $3.50 in 2014.

While China cut back on its Iranian imports past year, it has been buying more lately as the nuclear decision loomed.

"These missiles are Iranian manufactured and delivered to the Houthis". He said the possibility of the Iran Air order being canceled would not pose a problem because Boeing's production plans no longer rely on those sales.

Without China on board, efforts to punish Iran may lack teeth.

The world's top oil exporter has previously said it wants nuclear technology only for peaceful uses, but has left unclear whether it also wants to enrich uranium to produce nuclear fuel, a process which can also be used in the production of atomic weapons.

Before global sanctions were lifted following the nuclear deal in late 2015, Iran's crude exports stood at just one million barrels per day, mostly to Asia and European countries.

"The market is now focused on OPEC and other producers' ability to react to this potential supply disruption", ANZ bank said on Friday.

Several US officials have acknowledged there is no "Plan B" if Washington can not win the support of allies - and Iran - to negotiate a new expanded agreement, which would end Iran's nuclear program, restrain its ballistic missiles program, and curb its support for groups in Syria, Lebanon, Yemen and Iraq. Demand has also been very strong, thanks to economic momentum in the United States and overseas.

Oil hits 3-1/2 year high after U.S. quits Iran deal