Here's why Trump wants to shut Iran out of the oil market

Donald Trump and Iran President Hassan Rouhani. —AFP

"In the next weeks all eyes will be on Iranian exports, whether there will be some cheating around USA sanctions, and on how quickly production will fall", said Riccardo Fabiani, an analyst for Energy Aspects.

Eight countries are set to receive sanctions waivers.

"Then they will pick up pressure towards the end of the year to cut Iran's sales".

Anger and distrust of the U.S. are surging again following President Donald Trump's decision to withdraw from Iran's nuclear deal with world powers despite Tehran's compliance with the agreement, which was negotiated under the Obama administration.

The report discusses an unsealed indictment in the United States which "provides detail on Iran's use of deceptive practices to procure export controlled items with military applications from the USA and elsewhere".

If the United States does in the end follow through on its strongest threats, choking off Iranian supplies entirely, that spare capacity could be completely exhausted, leaving nearly nothing left to cover unexpected disruptions in other trouble spots. The sanctions are created to exert financial pressure by cutting the Islamic Republic out of the global market.

On Monday, Treasury will add more than 700 names to the list of blocked entities, he said, which includes "hundreds of targets previously granted sanctions relief under the JCPOA, as well as more than 300 new designations".

"From putting Iran "on notice" at the start of 2017, to violating and withdrawing from the successful, multilateral Iran nuclear agreement despite Iran's verifiable compliance and strong objections from our allies, to these latest actions to strangle Iran's economy, this administration is beating a path to war".

The US, which is in the process of becoming the world´s leading producer thanks to its shale oil operations, could meet part of the demand, but lacks export capacity, said the analyst.

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Quoting a senior USA administration official, Bloomberg News reported that the eight parties include Japan, India and South Korea. Unlike many other news organizations, we have not put up a paywall.

India along with seven other nations have been exempted from sanctions getting imposed against them for importing oil from Iran.

Donald Trump, since breaking that deal in May, has vowed to cut off Iranian oil revenue completely, and oil exporters and tankers will be among 700 companies, individuals, vessels and aircraft that will be added to a USA sanctions blacklist on Monday.

Part of the explanation lies in the ambiguous position of the United States, which initially insisted that the sanctions were created to reduce Iranian exports to zero barrels, but has since has softened its position.

Midnight on Sunday will mark a dividing line in the world of oil.

Iran is heavily dependent on its exports of oil, and renewed sanctions, if effective, would hit the economy hard.

He told reporters: "Our ultimate aim is to compel Iran to permanently abandon its well-documented outlaw activities and behave as a normal country". "The sanctions are indeed coming", Netanyahu said in a statement released by his office.

The Trump administration has looked to other Middle Eastern producers, most notably Saudi Arabia, to increase production.

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