How Will President Trump Use Oil Sanctions?

While President-elect Donald Trump is said to have plans to target Iran’s oil exports with tougher sanctions, criticizing the current administration for not enforcing existing sanctions, it will likely have a much larger impact on prices at home because China will retaliate, for one.

It would not be necessary to slap new sanctions on Iran; rather simply to more strictly enforce the existing sanctions, which would take nearly 1 million bpd of oil off the market and upset the fragile supply-demand setup we have right now.

For the most part, this is, then, all about China–the main buyer of Iran’s sanctioned oil. There are some indications from the president-elect himself (beyond the media bluster) that he understands the danger of over-sanctioning and disrupting the market.

The ripple effects could be rising gasoline prices at home and a weakening of the US dollar. However, there’s a dangerous quid pro quo here.

Putin is rather excited over a Trump victory because the Trump campaign has essentially suggested it would remove sanctions on Russia.

In other words, he sanctions Iran and risks the market disruption because he assumes that everything will balance out if he removes Russia sanctions and leaves Ukraine with few options.

Iranian IRGC commanders have been talking about a direct strike on Israel (first mentioned on Oct 25), but since then there has largely been silence, with only limited attacks from proxy Hezbollah on Israeli.