The US announcement this week that it will not be renewing waivers on Iranian oil sales after 2 May (MEES, 26 April) has thrown Opec+’s strategy off kilter. The move will force Iran to cut output further, although much of the production losses have already been baked in over the past year.

Iranian output declined from 3.85mn b/d to around 2.75mn b/d in January before rebounding slightly on increased oil sales to 2.80mn b/d last month (MEES, 5 April). Iran typically refines around 1.7mn b/d, providing a secure outlet for the bulk of its current output. Meanwhile, efforts by the US to drive Iranian exports to zero are overly ambitious, and trade flows will continue. (CONTINUED - 1260 WORDS)