It seems like just last week the U.S. lifted the decades-long sanctions it held on Iran…
It was actually just last year that the Iran Nuclear Deal was put into action, and the country still hasn’t quite recovered.
Originally placed in 1979, these sanctions cut off economic ties between Iran and a number of U.S. allies after political skirmishes put them at odds.
This froze as much as $10 billion in Iranian assets overseas, and nearly took Iran out of the oil game entirely.
Before the sanctions, the country was able to pump up to 6.6 million barrels per day at its peak. At the time, Iran was the second largest producer in the Organization of Petroleum Exporting Countries (OPEC), and the fourth-largest crude exporter in the world.
When customers and cash alike were cut off, Iran’s oil industry took a nosedive.
The country has struggled to reach pre-sanction production levels ever since.
Now, President Trump, who was never a fan of the Iran Deal to begin with, is threatening the country with a new round of sanctions aimed at stifling its ballistic missile development.
This could land Iran right back where it was before the original sanctions were lifted.
And there’s no telling how big of a blow this would be to OPEC as a whole…
The cartel is already tearing itself apart from the inside. Problems between Saudi Arabia, Iran, and Qatar are only amplified by ongoing economic and political problems within Libya, Venezuela, and Algeria.
It doesn’t help that Trump is also considering sanctions against Venezuela as well.
How much more pain can OPEC take now?
Of course, our president is comfortable with the idea of sanctions because of his “America first” mentality.
The oil industry in America, as well as our neighbor to the south, is flourishing as oil takes the slow, painful route to recovery.
All signs are pointing to OPEC as we know it not being around to see that recovery happen.
To read more about possible sanctions against Iran, click here to read the Reuters article.