Oil: Iran sanctions could cost U.S. drivers
The Trump administration wants “to push Iranian oil sales to zero,” said Carol Morello and Karen DeYoung in The Washington Post. Secretary of State Mike Pompeo announced this week that the U.S. will impose sanctions on five countries—China, India, Japan, South Korea, and Turkey—unless they stop importing Iranian oil by May 2. It’s part of a “maximum pressure” campaign intended “to force Iran to choose between a complete change in its behavior and foreign policy, or economic collapse.” Tehran called the sanctions “illegal” and threatened to close the Strait of Hormuz, a key oil-shipping channel.
The U.S. is relying on Saudi Arabia, the United Arab Emirates, and other OPEC countries “to hike output and prevent a price spike,” said Tom DiChristopher in CNBC.com. But producers are fearful of repeating last year’s oil price crash and will likely “proceed with caution rather than open the taps.” That could result in a “painful summer at the pump for Americans” and potential put a dent in consumer confidence. The national average for regular gasoline has ticked up to $2.84 a gallon over the past two months, and analysts now expect it to top $3. “We’re getting to a point where this could turn ugly,” says Savita Subramanian of Bank of America Merrill Lynch.