US: "Will Reduce Iran's Oil Exports to '0'"

Korea Economic Daily

Summary

The United States announced strong measures to completely block Iran's oil exports, causing international oil prices to turn upward.
US Treasury Secretary Yellen emphasized that with the goal of collapsing Iran's economy, they would reduce Iran's oil exports to nearly zero, warning of the possibility of the rial's value declining.
Experts believe that the strengthening of US sanctions against Iran could potentially cause disruptions to global oil supply.

Bessent: "Will Collapse Their Economy"

Complete Review of Iran Sanctions Exemptions

International Oil Prices Turn Upward

The United States has announced strong measures to effectively block all of Iran's oil exports while reaffirming its 'maximum pressure' policy on Iran.

US Treasury Secretary Scott Bessent stated on the 6th (local time) during a speech at the New York Economic Club, "Our goal is to reduce Iran's daily oil exports of 1.5 million barrels to nearly zero." Secretary Bessent warned, "The purpose is to collapse Iran's economy," adding, "The value of Iran's legal currency (rial) is likely to plummet, so if I were Iranian, I would cash out all rials right now."

International oil prices immediately turned upward following Secretary Bessent's remarks. On this day, West Texas Intermediate (WTI) crude for April delivery closed at $66.36 per barrel on the New York Mercantile Exchange, up 0.08% from the previous day, while Brent crude for May delivery rose 0.23% to close at $69.46 per barrel on the London ICE Futures Exchange. The price increase was limited due to OPEC's announcement of increased oil production next month, uncertainties related to US tariffs, and geopolitical tensions surrounding the Russia-Ukraine peace negotiations. Natasha Kaneva, a JP Morgan analyst, explained in a letter to clients, "The only factor that can pull up oil prices in the current market is the reduction in Iranian oil supply."

The US State Department is conducting a comprehensive review of existing Iran sanctions exemptions. State Department spokesperson Tammy Bruce said during a briefing that day, "The US is reviewing existing sanctions exemptions from economic and financial perspectives," adding, "The sanctions exemption allowing Iraq to purchase electricity from Iran is also set to expire on the 8th." She further emphasized, "We continue to stress that the Iraqi government needs to reduce its dependence on Iranian energy as quickly as possible."

If US pressure materializes, there is a high possibility of disruption to global oil supply. President Trump previously directed a strategy to completely block oil exports to prevent Iran's nuclear weapons development, while stating, "I hope there will never be a need to implement maximum pressure on Iran."

Reporter Lee So-hyun y2eonlee@hankyung.com