Trump Has Options If Oil Market Panics About Iran
The administration has a few safety valves.
Oil markets have so far reacted to President Donald Trump’s decision to withdraw from the 2015 Iran nuclear deal without either enthusiasm or panic — without even much apparent interest. There are many good reasons for this, but also many reasons to think oil markets’ complacency could change. Fortunately, the Obama-era sanctions that Trump has moved to reimpose have some lesser-known safety valves should oil markets later overheat as a result of the Iran decision.
After some gyrations in anticipation of Trump’s announcement on Tuesday, Bloomberg’s spot market price for oil finished the day just two cents above where it began. This seeming indifference is in itself interesting, when the U.S. has just announced that it will levy the toughest sanctions on one of the world’s largest oil producers.