"Sanctions Are Sanctions on Paper": Energy Aspects

The main buyers of Iranian oil are the Chinese teapot refiners, with neither side using US dollars or the US financial system, making any new sanctions hard to enforce according to Amrita Sen, Director of Research at Energy Aspects.

• “It’s not easy for the US to enforce anything on them, they can continue to buy it [Iranian oil] and they will,” Sen said.
• “You could get lower but about 1mn bpd [of Iranian oil] will continue to flow into China,” Sen added.
• “The lack of US enforcement was the reason that Iranian oil exports went up by about 600,000 bpd last year,” she said.
• On US commitment to enforcing sanctions, Sen said “I think the numbers speak for themselves,” referring to the growing levels last year.
• “Let’s not kid ourselves, this is a US election year, I think all sanctions are sanctions on paper,” Sen said.
• She said the geopolitical premium priced into oil at them moment is “not very much”, adding this is “physically the weakest point for oil right now, with demand to grow into summer.”