'If they don't have the barrels, they don't have the barrels': Oil could soar to $100 as Trump shuts Iran out of the market

Less than a month before another round of US sanctions against Iran take effect, analysts say$100 oil could be on deck.

  • The State Department has ordered buyers to cut oil imports from Iran by November 4.

Less than a month before another round of US sanctions against Iran take effect, analysts say hundred-dollar oil could be on the horizon.

The Trump administration has called on buyers to cut off oil imports from Iran squeeze

"Higher oil prices seem inevitable and, in our view, $100 per barrel is easily within reach," economists from the Bank of America Merrill Lynch wrote in a recent research note, citing a looming dropoff in Iranian production.

Iran's crude exports have fallen more than expected ahead of the sanctions, even as the Islamic Republic offers Asian customers the cheapest prices in more than a decade versus Saudi grade. According to tanker data compiled by Bloomberg, shipments dropped by just over a quarter million barrels per day in September to the lowest level since 2016.

"The European Union is strong on rhetoric and weak on follow-through," John Bolton, the national security adviser, said in a conference speech last month. "We do not intend to allow our sanctions to be evaded by Europe or anybody else."

Helima Croft, a former CIA analyst who is now head of commodities research at RBC, said plummeting production in Venezuela and Angola leaves little room to balance other supply risks in Libya, Nigeria and Iraq.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!" the president said in a recent tweet. "We will remember. The OPEC monopoly must get prices down now!"

"With Trump and these tweets, I think there are diminishing returns," she said. "In terms of going forward, we're looking at an ever-shrinking pool of OPEC barrels. You can yell at them. But if they don't have the barrels, they don't have the barrels."

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