TEHRAN (ICIS)–Iran’s base oils market could be negatively affected by any US move to re-impose sanctions on the country but market sources told ICIS they expected the impact to be limited due to their familiarity of conducting business even with sanctions in place.
US President Donald Trump is required to regularly waive a series of sanctions on Iran that a 2015 nuclear agreement lifted, failing which the sanctions would be re-imposed.
The next deadline for the waiver is mid-May and many US officials believe Trump might not renew the waiver.
Iran is a major producer of Group I base oils and its export markets include the United Arab Emirates (UAE) and India.
A re-imposition of sanctions would firstly hit the international payments systems for Iran’s base oils exporters, potentially blocking them from access to certain banking services.
“Of course we are worried as this could affect how we do our business,” said one market source in Iran.
But the impact is not expected to be prolonged as Iran’s businesses have systems that were in place that could facilitate payment methods dating back to the years before the sanctions were lifted.
“We are used to conducting business even with sanctions in place,” said another Iranian source. “Of course we are concerned but these [sanctions] are not new to us.”
The US President in January agreed to waive the sanctions against Iran for what the administration had said was the “last time”, unless an agreement could be reached between the US and Europe within the next 120 days that would strengthen the nuclear deal.