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Sanctions against Iran are now a reality

All eyes are fixed on Iranian oil exports as the US reimposes sanctions on Monday, says energy analyst.

Photo: Bloomberg

The US is reimposing all the sanctions against Iran which were lifted in connection with the Joint Comprehensive Plan of Action. These include an oil embargo intended to halt all oil exports form the country.

These sanctions the most concrete result of US President Donald Trump's controversial decision to withdraw the US from nuclear accord with Iran. According to US Secretary of State Mike Pompeo, these measures are "the toughest sanctions ever," reports French news agency AFP.

The announcement that all previous sanctions would be reinstated from Monday was first published on Friday.

Sanctions will impact shipping, financial firms and energy companies. However, they will primarily affect non-Iranian enterprises doing business with the country.

Regarding the oil embargo, waivers have been granted to eight countries, allowing these to continue importing oil from Iran in a limited quantity over the next six months.

Oil market uncertainty

Supreme Leader of Iran Ali Khamenei condemned the sanctions on Saturday. Trump has "disgraced" US prestige and will be the biggest loser in the two countries' conflict over the longer term, Khameni says.

On Friday, France, Germany, the UK and the EU criticized the US's decision to reimpose sanctions. They have evaluated that Iran has not violated the terms of the nuclear agreement form 2015.

This has not caused the US to shift course.

"(...) sanctions of the United States will be reimposed at midnight tonight," says Pompeo to US media CBS.

Iran's economy is dependent on oil exports. Saudi Arabia is the only country in the world with sufficient reserve resources to compensate for oil withheld from the market by the embargo.

According to AFP, related uncertainty is affecting the global oil market up to the sanctions.

"All eyes will be fixed upon Iran's exports. Will Iran try to avoid the US's sanctions, and how quickly will production decline?" says Riccardo Fabiani, an energy analyst for Energy Aspects.

English Edit: Daniel Frank Christensen

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