US President Donald Trump stopped special exemptions on the possibility of buying oil from Iran. The oil market reacted by a powerful growth of more than 3%, since one of the largest players could be excluded from the market. Let’s figure out whether to wait for a shortage of oil and a further rise of price.
So, the White House said that the United States will not extend the effect of exceptions to oil sanctions against Iran, which expire on May 5 of this year. This means that such large importers as China, India, Japan, Turkey, South Korea and Italy no longer have a privileged status.
In case of violation of the restrictions imposed on November 5, 2018, these countries are threatened by US sanctions. The State Department clarified that the ultimate goal-to deprive Iran of income from oil exports.
On the market, this decision is worrying because of a possible shortage of oil in the market, which could lead to unwinding of prices. Iran is one of the largest suppliers of raw materials on the market – in February 2019, exports reached 1.3 million barrels per day.
Somewhat reassures investors that the US does not support any of the other major importers. And if China openly ignores sanctions, then the closest European allies of Washington – Germany, the United Kingdom and France – are preparing to create a special mechanism to bypass the sanctions.
Brent crude oil chart
Brent oil quotes tested the ascending channel upper trend line. The further move depends on whether the bulls manage to breakout the level 74.7. If their attempt will be successful, the growth is likely to continue with goals 78 and 81. Otherwise, it makes sense to play short with a goal of 71.