Iran Says It Is in Charge of Security of Strait of Hormuz Later in the Day

June 14, 2019 Iran says it is in charge of security of Strait of Hormuz later in the day. - state Radio Tension between Iran and the United States has risen since May last year, when U.S. President Donald Trump Iran said on Friday it was responsible for maintaining the pulled out of a 2015 nuclear deal between Iran and major security of the Strait of Hormuz in the Gulf, state radio powers that aimed to curb Tehran's nuclear ambitions in reported, adding that blaming Tehran for attacks on two exchange for sanctions relief. oil tankers in the Gulf of Oman was alarming. Iran has repeatedly warned it would block the Strait of "We are responsible for ensuring the security of the Strait Hormuz if it cannot sell its oil because of U.S. sanctions. and we have rescued the crew of those attacked tankers Tensions have increased further since Trump reimposed in the shortest possible time," Radio quoted Foreign sanctions on Iran and acted at the beginning of May to Ministry spokesman Abbas Mousavi as saying. force Iran's oil customers to slash their imports to zero or "Obviously, accusing Iran for such a suspicious and face draconian U.S. financial sanctions. unfortunate incident is the simplest and the most Iran's oil exports, its economy's lifeblood, have dropped convenient way for (U.S. Secretary of State Mike) to about 400,000 bpd in May from 2.5 million bpd in April Pompeo and other U.S. officials. These accusations are last year. alarming." Meeting on Friday on the sidelines of a regional summit in The United States blamed Iran for attacks on two oil Kyrgyzstan, Chinese President Xi Jinping told Iran's tankers in the Gulf of Oman on Thursday that drove up oil President Hassan Rouhani on Friday that China will prices and raised concern about a new U.S.-Iranian promote steady development of ties with Iran no matter confrontation. how the situation changes, the official Xinhua news It was not immediately clear what caused the explosions agency reported. that forced the crews to abandon ship and leave both the Norwegian-owned Front Altair and Japanese-owned IEA cuts 2019 estimate for oil demand growth on Kokuka Courageous adrift in waters between Gulf Arab global trade worries states and Iran. The blasts, south of the Strait of Hormuz, followed last The outlook for oil demand growth in 2019 has dimmed month's sabotage attacks on vessels off the Fujairah due to worsening prospects for world trade, the emirate, one of the world's largest bunkering hubs. Iran International Energy Agency (IEA) said on Friday, has distanced itself from the attacks. although stimulus packages and developing countries Almost a fifth of the world’s oil passes through the Strait - should boost growth going into 2020. some 17.2 million barrels per day (bpd). Consumption The Paris-based IEA, which coordinates the energy was about 100 million bpd in 2017, data from analytics policies of industrial nations, revised down its 2019 firm Vortexa showed. demand growth estimate by 100,000 barrels to 1.2 million Brent crude futures rose 0.6% to $61.69 per barrel in barrels per day (bpd), but said it would climb to 1.4 million Asian trade on Friday, having gained 2.2% the previous bpd for 2020. day, though at one point they had surged as much as "The main focus is on oil demand as economic sentiment 4.5% in the wake of the attacks. weakens ... The consequences for oil demand are Iran's key regional rival Saudi Arabia said that Riyadh becoming apparent," the IEA said in its monthly oil report. was committed to providing reliable oil supplies to global "The worsening trade outlook (is) a common theme markets. across all regions", it added. One source said the blast on the Front Altair, which The oil demand growth forecast assumes the caught fire and sent a huge plume of smoke into the air, maintenance of U.S. and Chinese tariffs imposed on may have been caused by a magnetic mine. The firm that goods in 2018, but the IEA said it had not factored in chartered the Kokuka Courageous tanker said it was hit further U.S. tariffs announced in May. by a suspected torpedo, but a person with knowledge of The IEA also attributed lacklustre demand growth in the the matter said torpedoes were not used. first half of the year to a slowdown in the petrochemicals The U.S. military released a video late on Thursday that it industry in Europe, warmer than average weather in the said showed Iran's Revolutionary Guard (IRGC) removing northern hemisphere and stalled U.S. gasoline and diesel an unexploded mine from the side of the Japanese- demand. owned oil tanker. Demand growth was likely to pick up to 1.6 million bpd in The U.S. military's Central Command also released the second half of the year on government measures to photographs showing the apparent mine, which attaches mitigate the economic slowdown and robust consumption to the side of a ship magnetically, before it was removed in the non-developed world. June 14, 2019 (continued) "Stimulus packages are likely to support growth in the sales, a French diplomatic source was straightforward: short term. In addition, the major central banks have "We want to save the nuclear deal because it helps stopped or slowed interest rate increases, which should peace in the region, but we have always had a historical support growth in 2H19 and 2020," the IEA wrote. relationship with Saudi Arabia so why would we U.S. sanctions on Iran and Venezuela, an output cut pact jeopardize this?" by the Organization of the Petroleum Exporting Countries The sharp drop-off in Iran's ability to sell its oil (OPEC) plus its allies, fighting in Libya and attacks on internationally has hit the economy hard, delivering tankers in the Gulf of Oman added only limited exactly the impact the Instex system is designed to uncertainty to supply, the IEA said. prevent in the long-term. Iran's production plunged by 210,000 bpd in May to 2.4 French finance ministry data shows France bought 2.2 mln bpd, the IEA said, its lowest levels since the Iran-Iraq billion euros ($2.49 billion) of Iranian light crude between war in the 1980s. Exports fell 480,000 bpd to 810,000 April 2017 and March 2018, making it France's third bpd. largest supplier. Surging U.S. supply as well as gains from Brazil, Canada But over the following 12-months, that figure fell 57% to and Norway would contribute to an increase in non-OPEC 936 million euros, with imports from Iran stopping supply of 1.9 million bpd this year and 2.3 million bpd in altogether from September 2018 onwards, as sanctions 2020. bit. In contrast, French purchases of Saudi oil jumped 50% to As Iran nuclear deal flounders, France turns to Saudi 3.7 billion euros between March 2018 and April 2019. for oil Industry sources say Saudi and Iranian crude oil have very similar properties that make them good substitutes. Over the past year, France has led a European push to Over the same period, Paris also substantially increased keep trade with Iran alive after the United States tore up its purchases of Russian and Iraqi crude, which are also the nuclear deal with Tehran and re-imposed sanctions. similar. But over the same period, data shows France has cut All countries had to reduce oil imports from Iran as purchases of Iranian oil and sharply increased imports sanctions mounted, although China and India continued from Iran's arch-enemy Saudi Arabia. to buy after initial U.S. waivers, although they have now In recent weeks, France has used its energy needs to also cut purchases. justify a surge in arms sales to the kingdom, even if there CLOSER SAUDI TIES is no evidence the 50 percent increase in Saudi France has nurtured close ties with Saudi Arabia. But the purchases of French arms last year was conditional on nuclear deal in 2015 between Iran and six world powers - France buying Saudi oil. the United States, France, Britain, China, Germany and The surge in France's buying of Saudi oil shows Paris is Russia - eased sanctions in return for Tehran curbing its doing less business with Iran even as it publicly nuclear programme, providing an economic lifeline for encourages European partners to find a way to keep Riyadh's rival. trade with Tehran flowing via the Franco-German-British France, with business ties in Iran, moved quickly to Instex trade system. capitalise, and some of its biggest corporations followed. It also underscores how difficult it is for a global power Total was the first international oil company to return to and permanent U.N. Security Council member like France Iran, while other French firms such as carmakers to stand up against the United States and its closest Arab PSA and Renault also moved back. -world ally when they are determined to put the squeeze Between 2016 and early 2018, French purchases of on Iran. Iranian crude oil soared to more than 2 billion euros a Last month, Defence Minister Florence Parly said trade year. ties with allies like Saudi Arabia were essential to However, U.S. President Donald Trump, who arrived in safeguarding France's security and energy interests. the White House as Iran's economy was reaping the "(Weapons) exports make it possible to forge close ties benefits of the deal, called it "the worst ever negotiated".

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