Iran Sanctions Response Darkens as EU Opposition Solidifies

[IsailedawayfromFR]

The Teheran Shuffle
The full resumption of US sanctions against Iran is set to take place in a month, with an initial stage having begun on August 6. I have already discussed here in ECRG Intelligence the impact that resumption will have on crude  oil prices. Over the past several days, forecasts of likely Iranian oil export declines have intensified with the slide happening sooner and to a greater level than anticipated.

That certainly puts additional pressure on oil prices generally, while introducing yet another instability factor into an already tense Persian Gulf.

But the situation hardly ends there. The sanctions are threatening both Iran’s primary source of trade revenue and the stability of the country’s domestic political system. And that is prompting some possible nasty options for Teheran.

Over the past several days my network has been abuzz over indications that this situation is about to turn nasty. More forceful moves seem to be afoot. Some of these are primarily to allow Iranian crude to get to international markets once the sanctions are applied.

Discussions include ongoing planning for utilizing Shiite support across the Shatt al-Arab both to foment dissent in Iraq and smuggle Iranian crude to market under the guise of Iraqi cargo. Another approach, which I have previously described here in ECRG Intelligence, is moving exports via contract swaps with both Russia and China. Volumes would either be transported via Russia into global trade or employ third parties in the case of Chinese support. The latter would make use of financial intermediaries in Singapore and Hong Kong.

Straits & Narrows
However, it is the more confrontational steps that have my contacts more concerned. Several sources have indicated that Teheran intends to provide accelerating support for Houthi rebel attacks against the Saudi oil export route through the water areas of the Bab el-Mandeb.

This is a narrow strait attaching the Gulf of Aden with the Red Sea, with the western border of Saudi Arabia just to the north, the Horn of Africa further west, and war-torn Yemen directly east. Previous Houthi missile attacks have forced Riyadh to suspend shipments through the strait.

While unlikely to make a major dent in overall Saudi export figures, the attacks have increased already-heightened tension levels in the region and have threatened to expand the civil war in Yemen where Saudi Arabia and Iran have been contesting through the use of surrogates.
https://energycapitalresearchgroup.com/ecrg-intelligence/iran-sanctions-response-darkens-as-eu-opposition-solidifies/

his bottom line is that the US/Iran trade squabble is morphing into a US/EU trade war.

[thackney]

https://www.mintpressnews.com/saudi-arabia-begins-construction-of-petrol-pipeline-through-yemen/249936/

Saudi Arabia has begun construction on a pipeline in the al-Mahra province in Yemen — which will allow the kingdom to transport oil directly to the Arabian Sea, bypassing the Strait of Hormuz and Bab-el-Mandeb Strait — a high-ranking Yemeni official told MintPress News.

The official, who spoke on condition of anonymity, said the new pipeline would allow Saudi Arabia to export oil from refineries in al-Mahra through the Rub’ al Khali Desert, the largest contiguous sand desert in the world, which lies in Yemen’s northeast....