HOUSTON: A global oil surplus is allowing the United States to accelerate its plan of bringing Iranian crude exports to zero, a U.S. State Department official said on Wednesday.
U.S. sanctions on Iran and Venezuela, two of the largest oil producers in the Organization of the Petroleum Exporting Countries (OPEC), and production cuts by OPEC and Russia have boosted global oil prices to near four-month highs and have made heavy crude more expensive for refiners.
Brian Hook, the State Department's special representative on Iran, said in remarks at the CERAWeek energy conference that the sanctions have denied Iran roughly US$10 billion in revenue since 2017, removing about 1.5 million barrels per day of Iranian oil from global markets.
President Donald Trump "has made it very clear that we need to have a campaign of maximum economic pressure" on Iran, Hook said, "but he also doesn't want to shock oil markets, he wants to ensure a stable and well-supplied oil market. That policy has not changed."
The global oil market is looking for signs that Washington may extend sanctions waivers for Iran's key customers in early May. The United States surprised global oil markets in November last year by allowing eight countries to keep importing Iranian oil.
The U.S. Energy Information Administration (EIA) has projected that world supply will exceed demand in 2019 by 440,000 barrels per day, Hook said.
"When you have a better supplied oil market it enables us to accelerate our path to zero. But we also know that there are a lot of variables that go into a well-supplied and stable oil market," said Hook, a senior policy adviser to U.S. Secretary of State Mike Pompeo.
Washington sanctioned Venezuelan oil exports in January and a massive power outage since last week halted crude exports from its primary port, essentially crippling the South American country's principal industry.
"We are aware that our diplomatic and economic pressure, the timing and the pace of that affects Venezuela's oil industry," Hook said.
He said the United States is monitoring global supplies for impact from sanctions. "I've met a few times with (Saudi Energy Minister) Khalid al-Falih over the last year when we knew we were taking a lot of oil, we wanted to ensure that we're doing this in a responsible way," he said.
Falih said on Sunday that OPEC's production-curbing agreement likely would last until at least June.
(Reporting by Florence Tan; Editing by Chizu Nomiyama and David Gregorio)