On Wednesday, October 11, BP’s Chief Executive told CNBC that there may be extreme volatility in oil prices in the coming time, as US is preparing to impose sanctions on Oil and gas sectors of Iran.
BP Chief Executive, Bob Dudley said in an Interview to CNBC that, “I think it’s going to be 45 days of extreme volatility, it could spike up, it could also go the other way”.
US President pulled out of Iran Nuclear Accord on May 8, 2018 and announced to impose sanctions on Iran in two phases. The first phase sanctions were targeting Iran’s metal, gold, software, and auto sector, and were in implementation from August 4. The second phase sanctions targeting Iran’s oil and gas sector and its Central Bank will be in full implementation from November 4.
US has warned all countries to not trade with Iran and to bring Iranian oil exports to zero by November 4. Those countries that will continue to trade with Iran will be sanctioned by US.
BP CEO says oil markets will see a period of ‘extreme volatility’ due to Iran sanctions https://t.co/ipNWKkW5sd
— CNBC (@CNBC) October 10, 2018
India has asked US to provide relief in sanctions on oil purchase from Iran as India is the second biggest buyer of Iranian oil and over dependent on Iran to fulfill its demand of energy requirement and cannot bring down Iranian oil import to zero immediately.
India has already asked its refineries to minimize the import of Iranian oil but cannot bring down to zero by November 4. In last month’s order Indian refineries reduced their order quantity to almost half.
He said, “If waivers were granted to others, to big oil consuming countries, you could see it (the price) go down, there’s a lot of uncertainty right now”.
Dudley said that the demand will be increasing and there may be shortage in the supply after November 4. He said that Saudi Arabia have the capacity to fulfill the shortage caused by the sanctions on Iranian oil.