During a briefing, a senior state department official announced that the Trump administration wants to eliminate imports of Iranian oil by its current customers. The official told journalists that, during a tour of countries that has already begun with a visit to Japan, U.S. officials will be “requesting that their oil imports go to zero, without question.”
The announced policy is akin to a reduction of over 2 million barrels per day.
Observers believe that Saudi announcement that it will boost its production to record levels in July suggests the Saudi commitment to raise production would have been coordinated with an American effort to eliminate Iran’s export market entirely. After the OPEC ministerial in Vienna on 22 June Saudi energy minister Khalid al Falih had said that ARAMCO would increase output by “hundreds of thousands of barrels”, with precise figures to be decided later.
However, there are doubts about whether Saudi Arabia can produce beyond its quota to make up for shortfalls from other producers, such as Venezuela, Angola and Libya; Iranian oil minister Bijan Zanganeh has said this is not permitted and that Saudi Arabia “can increase its production by less than 100,000 b/d”. Other reports suggest that Saudi production in June was 10.72 mbd, 700,000 b/d higher than the previous month, and is expected to be 10.8 mbd in July.
Thus, Iran is facing the most serious challenge to its economy and political integrity to date. The Trump administration has taken its avowed commitment to exert “unprecedented financial pressure” far beyond the realm of coercion and into the realm of destruction. For Iran’s government, which receives about half of its revenues from oil sales, the prospects are grim. Such an outcome is consistent with the regime-change goals of the Trump administration and its regional allies.
