Iran Saudi Tensions to Escalate After US Ends Iran Deal

President Donald Trump’s withdrawal from the Iran nuclear deal is likely to exacerbate tensions between two of the world’s biggest oil producers at next month’s OPEC meeting, one analyst told CNBC Wednesday.

Global oil supplies were already tightening ahead of the U.S. president’s decision to pull out of the landmark nuclear accord on Tuesday, while crude futures have since soared to multi-year highs.

West Texas Intermediate graph

Yet, in a move that defied pleas from close allies, Trump said he would seek to re-impose economic sanctions on Tehran, elevating concerns about the future of the supply-cutting deal between OPEC members and allies including Russia.

“I think it is hard to believe that there won’t be some gamesmanship the next time that we gather in Vienna in June,” Andy Critchlow, head of EMEA energy content at S&P Global Platts, told CNBC Wednesday.

“Is it really in (Iran’s) interest now to sign up to a Saudi-led Russian deal to extend these cuts? Of course, the high oil price suits Saudi Arabia … But the Iranians can think ‘now we will play the long game’ and play hardball here,” he added.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza