Tillerson’s firing injects uncertainty into oil markets


By choosing Pompeo as Tillerson’s successor, Trump is increasing pressure on Europe to agree to changes to the deal, said Mark Dubowitz, CEO of Foundation for Defense of Democracies and a longtime critic of the accord.

“The appointment of Mike Pompeo is a message to the Europeans that they better fix the fatally flawed Iran deal by May 12, or the president will take America out of the deal and reimpose the most powerful economic sanctions on their companies and banks, who are enriching the Iranian regime,” he said.

An American exit from the Iran nuclear deal is unlikely to immediately upend oil markets, said Croft. It would take time for renewed sanctions to squeeze Iranian oil supplies, although the market could begin pricing risk into crude prices.

There was little evidence of that premium on Tuesday, as oil prices were sharply lower, dragged down by concerns about surging U.S. crude production.

The administration could have a more immediate impact on the oil market if it decides to ratchet up sanctions in Venezuela, where economic crisis and mismanagement have caused sharp declines in the petrostate’s crude output, said Croft.

2018-03-13 19:29:00

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