Viewpoint: Trump knew Iran deal wasn't working

The US could impose sanctions on Iran which has ramped up oil production in recent years

The US could impose sanctions on Iran which has ramped up oil production in recent years Todd Korol Reuters

However, the deal was with a number of other nations as well including allies, the UK, France, and Germany, and the European Union as well as Russian Federation and China.

A number of important European companies, including Airbus - which has a deal to sell aircraft to Iran worth roughly €20 billion - announced on Wednesday that they would comply with the USA sanctions.

Asian crude oil traders pointed to the US-Iran news as the immediate cause of the strengthening Dubai crude structure, which had been trading at 59 cents/b on April 30.

Regardless of their magnitude, any loss of oil supply in today's market would be bullish. Already, Brent crude has crossed $75 per barrel and some feel it could climb as high as $100 per barrel over the next few months while others view current levels to be unsustainable.

According to reliable reports, the U.S. Treasury Secretary confirmed that the U.S. and Saudi Arabia have reached a considerable level of political understanding.

The telephone call covered other global issues with Mrs May congratulating the USA president on the safe return of three Americans who had been held in prison in North Korea.

Iran has said it had asked Europe's Airbus to announce whether it would go ahead with a plane deal with Tehran following the USA pull-out.

At an average cost of US$50 a barrel for oil, Caribbean economies did better.

There's no evidence that Trump will offer that kind of change any time soon, and former officials who have dealt with Iran were pessimistic about the prospects for Americans held in the country.

Analysts had expected a major economic boom in Iran after sanctions were lifted in 2016 in return for Iran rolling back its nuclear program.

Over the past year, the Organization of Petroleum Exporting Companies (OPEC) along with Russian Federation has cut production to boost crude prices. The People's Republic stands to benefit if it can use its leverage as the world's largest importer of crude by insisting that its oil purchases from Iran be priced in yuan.

China is positioned to be a chief beneficiary of the USA decision to withdraw from the Iran nuclear deal as it would give China leverage to demand oil imports be priced in yuan, several currency experts said on Thursday. Sharp declines in its Iranian crude imports are likely over the coming months. This coupled with low production from Mexico and Venezuela could lead to supply side pressure in the immediate term and we see some upside risk in the immediate term.

Saudi Arabia and Iran have long contended over influence in the region. While such money might be limited, it would help blunt the impact of Trump's efforts to block Iran's access to Western capital markets. Iran and its elite Revolutionary Guards do have close ties to other groups such as the Lebanese Hezbollah and various militias battling rebels and jihadis like the Islamic State militant group (ISIS) in Iraq and in Syria, where Israel considers Iran-backed groups a threat and has launched a number of strikes against them.

India and China are the two major importers of crude from Iran, accounting for nearly 30 percent of the Iranian crude production.

Of this, crude exports were around 2.45 million b/d, a rise of some 400,000 b/d from March, though condensate exports remained largely steady month-on-month.

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