United States’ sanctions on Iran’s oil industry are unproductive and there will be consequences to such a move, Russian Energy Minister Alexander Novak said.
“Our position remains that this is unproductive; this is wrong,” Novak said when asked about the possible impact US sanctions on Iran’s oil industry could have, CNBC reported.
“It is better to continue working in the market, Iran being just another exporter that provides stable supplies to the market,” Novak said, speaking to CNBC’s Geoff Cutmore at the Eastern Economic Forum last week in Vladivostok, Russia.
“It is one of the richest in resources and has a solid standing in terms of its energy capability both in the OPEC and in the energy markets as a whole. So, I think there will be consequences, I am sure, but we could only comment once they are in place,” he said.
Sanctions are due to be reimposed on Iran’s oil industry on Nov. 4. The move comes after US President Donald Trump decided to withdraw the United States from an international nuclear deal in May. The US has said that any countries or companies that conduct transactions with Iran are liable to face secondary sanctions.
Needless to say, the move is expected to severely impact Iran’s oil industry and exports, with a production decline of over a million barrels a day—and likely upward pressures on oil prices—a distinct possibility, according to analysts.
Novak told CNBC that it was difficult to comment on the consequences of Iranian sanctions as he was still waiting to “learn the legal particulars” and effects of the sanctions.
“We do not know how companies will react, how countries that engage with Iran will react. We will have to see the actual adopted documents/sanctions,” he said.
The US is keen to see oil-producing countries like Saudi Arabia and Russia increase oil production to ensure the shortfall created by its Iran sanctions does not push up global oil market prices too high.
US Secretary of Energy Rick Perry met Novak in Moscow on Thursday but it has not been disclosed whether Iranian sanctions and how to prevent those measures from negatively impacting the market were discussed.
