In an interview with Lester Holt of NBC Nightly News to be aired on Monday night, Iranian President Hassan Rouhani predicted U.S. sanctions would be unable to paralyze Iran’s oil industry or inflict enough economic damage to jeopardize the survival of his government.
“The United States is not capable of bringing our oil exports to zero. This is an empty promise, and it’s a threat that is empty of credibility. Perhaps on this path, we will sustain certain pressures, but certainly, the United States will not reach its objective,” said Rouhani.
Iran’s oil minister Bijan Zanganeh made the same statement on Monday, in almost exactly the same words: “The U.S. dream of getting Iran’s oil exports to zero won’t come true.”
Although it remains to be seen what the Europeans will do, one significant customer of Iranian oil has brought its imports to zero over the past quarter: South Korea. South Korea formerly imported about 180,000 barrels per day from Iran, putting it behind only China and India as a consumer of Iranian oil, but it has not purchased any since June.
Reuters reported on Monday that Iranian oil exports have decreased considerably more than was predicted when President Donald Trump withdrew from the Iran nuclear deal and reimposed sanctions. The estimated cut in Iranian exports was 300,000 to 700,000 barrels per day, while the actual reduction has been 1 million to 1.5 million.
“Export is not going to be zero, but it is going to be significantly less than it was, and probably lower than most people expected when sanctions were announced,” oil trading head Ben Luckock of Trafigura said on Monday.
President Trump asked OPEC to increase oil production to keep prices down, but on Monday the group officially refused his request.
“We expect that those OPEC countries with available spare capacity, led by Saudi Arabia, will increase output but not completely offset the drop in Iranian barrels,” Emirates NBD commodities analyst Edward Bell said.