Oil Tankers Go Dark Off Malaysia As Sanctioned Iranian Crude Exports To China Accelerate

There has been much confusion over the Trump admin's strategy regarding Iran and its oil exports. 

While on one hand, the US has placed “maximum pressure” sanctions on Iranian oil exports to give the nuclear deal negotiations a help-along, the WSJ wrote in an editorial today that a White House directive was delivered last week to pause all new sanctions activity. The WSJ suggests that this is handing off some of the leverage that the USA currently has, and also represents a free-kick to the USA’s principal geopolitical competitor, China, who is by far the largest buyer of Iranian oil cargoes. The lighter touch on sanctions arrives at a time when OPEC+ has agreed to ramp up production by an additional 411,000 bbl/day. So, although crude oil prices are rallying today and face plenty of geopolitical risks on the road ahead, in the absence of a major risk event coming to fruition any rallies are likely to be capped by the plentiful supply outlook.