US will announce complete cutoff to Iran oil exports on Monday - report
Bullish news for oil as the US gets aggressive with Iran on oil
The US will no longer waive Iran sanctions for certain importers, the Washington Post reports.
The news should be a large tailwind for crude prices this week as the US gets serious in efforts to limit Iran's exports, and cut them to near zero. In September of 2018 the US was expected to be tough but ultimately granted broad waivers in a move that caused the Q4 plunge in crude prices.
This time this US isn't backing down.
"On Monday morning, Secretary of State Mike Pompeo will announce to the media that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate," the Post report says, citing two sources.
WTI crude is currently up 31-cents to $64.31 but the market is sleeping on this development. It's should provide a significant boost to oil prices, CAD, NOK and any other oil exporters. One caveat in the report is that Pompeo will also announce offsets through commitments from other suppliers such as Saudi Arabia and the UAE. Those details will be important.
Still, it's highly unlikely there is enough spare capacity out there to make up for Iran's current exports of 1.25 million barrels per day.
Another issue to watch will be how Iranian importers respond. India has continued to be a significant buyer. Russia could also help Iran get oil to market.
Technically, the chart I'm watching is Brent. It's up 34-cents to start the week and testing the 61.8% retracement of the Q4 rout. A break above it could signal a rally to as high as $86.