Iranian Oil Minister Bijan Zanganeh said on Monday that the balance between supply and demand of oil in the market is fragile. The minister called on crude producers to be wary of the risks caused by the sanctions imposed by the United States.
The prices of oil are dependent on the support of the United States sanctions on Iran and Venezuela together with the supply cuts imposed by the Organization of the Petroleum Exporting Countries and other major producers.
According to Zanganeh, the oil market is in a fragile situation considering the supply and demand balance, so the oil producers should be wary of any trouble in the oil market, especially due to U.S. measures against big oil producers.
The Iranian minister is scheduled to travel to Moscow with Russian Energy Minister Alexander Novak to discuss the oil market. Zanganeh said that Russia is one of the biggest oil producers in the world, and Iran is in a situation that they thought it is necessary to discuss the oil market with Russian.
In November, the United States re-imposed the sanctions on Iran after the Western country pulled out of a 2015 nuclear deal between Iran and six other world powers. The sanctions imposed on the country decreased its import to almost a half.
According to reports, the United States plans to renew waivers for the sanctions for most countries, including China and India, which purchases Iranian crude in exchange for assurances that they will cut combined imports to less than 1 million barrels per day.
The United States President Donald Trump plans to choke the main source of revenue of Iran by halting the Iranian oil exports. It is an effort of the United States to place pressure on Iran to curtail its nuclear program and stop the alleged backing of militant groups across the Middle East.
The United States has withdrawn from the 2015 international agreement with France, Britain, Germany, Russia, China, and Iran which aims to prevent Iran from developing nuclear weapons. The agreement said that they will remove sanctions on Iran if it is proven that Iran follows the deal.
According to Reuters, the United States is considering to place additional sanctions against Iran that will target its economy that was not affected by already imposed sanctions.
A senior Trump administration official said that they just want a continued chilling effect and they want businesses to continue to think to do business with Iran is a terrible idea at this point.
