President Donald Trump cleared China to purchase Iranian oil on Tuesday, eliminating longstanding sanctions limiting the trade relationship.
Trump announced the move in a social media post while flying to Europe on Air Force One, adding that he hopes China will also purchase “plenty” of oil from the U.S.
“China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the U.S., also. It was my Great Honor to make this happen!” Trump wrote.
Oil prices continued to drop and markets surged Tuesday as Trump battered Iran and Israel into accepting a precarious ceasefire agreement. The agreement has curbed concerns that Iran would shut down the Strait of Hormuz, a key trade route for shipping oil across the globe.
EXXONMOBIL CEO TALKS OIL SUPPLY AMID IRAN-ISRAEL CONFLICT
Crude hit $65 per barrel in extended trading after West Texas Intermediate crude futures fell more than 8% to about $67 per barrel on Monday afternoon. Brent crude, the international benchmark, fell to $70 a barrel.
Washington reinstated sanctions on Tehran in 2018, and Trump’s administration has imposed several new rounds of sanctions on Iran’s oil trade since taking office in January.
Trump’s sanctions had included penalties on three Chinese oil import companies, which led to curtailed buying.
Last week, industry experts warned that Iran shutting down the Strait of Hormuz could cause prices to surge to as much as $120 a barrel.
Roughly 20% of the world’s oil supply travels through the strait, though closing it would significantly hurt Iran’s own revenue. Energy Secretary Chris Wright dismissed concerns about its closing on Tuesday, telling Fox News that the move would harm Iran more than it would anyone else.
“The United States today is a net oil exporter. We don’t count in any meaningful way on oil coming out of that strait. Iran would harm itself more than it would harm anyone else. It’ll probably cause a mess or trouble, but it’ll be small,” Wright said.
Reuters contributed to this report.
Read the full article here
