US sanctions Iranian metals industry after attack
Details companies impacted by sanctions.
President Donald Trump today rolled out a new round of economic sanctions targeting Iran's metals industry in an effort to punish the country for a missile attack earlier this week on two US military bases in Iraq.
The sanctions are both primary and secondary, meaning that they would apply to third parties doing business with Iran.
The latest round includes some of the previously sanctioned steel, copper and aluminum manufacturers in Iran and a Chinese trading company, Pamchel Trading Beijing, that the US said has bought tens of thousands of metric tons of steel slabs on a monthly basis since August 2019 from Iran's Mobarakeh Steel. Another Chinese company and a ship it operates are included in the sanctions.
In 2018, Iran produced 24.5mn t of steel, making it the 11th largest steel producer, according to Worldsteel, an international industry organization.
In total, the Department of the Treasury will sanction an additional 22 businesses and three vessels for operating in Iran's iron, steel, aluminum, or copper sectors.
An Omani company, Reputable Trading Source, is part of the new sanctions that will be enforced by the US Treasury. The sanctions also include a Seychelles-based entity, which the Treasury Department accused of being a front company for shipments to Iran.
"As a result of these actions we will cut off billions of dollars of support to the Iranian regime," said secretary of state Mike Pompeo.
The complex web of sanctions the US has imposed since 2018 already prohibits nearly all transactions with the Iranian economy for US and foreign companies, at the threat of financial and criminal penalties.
Trump also issued a new executive order giving the administration even broader authority to impose sanctions on foreign companies that continue to work in Iran. The multiple sanctions programs already have made most foreign banks wary of processing any transactions involving Iran, including imports of food and medicine that nominally are allowed under the US sanctions program. An EU-sponsored mechanism set up to bypass the dollar-based transactions with Iran, the Instex exchange, has not been able to function effectively.
"We have warned Instex and others they will most likely be subject to secondary sanctions depending on how they use that," US treasury secretary Steve Mnuchin said. But he added that the US is working with Switzerland to set up an exchange that will allow processing humanitarian transactions with Iran.
US sanctions cut Iran's oil exports, critical to the country's economy, by 2mn b/d, but have fallen short of the professed US objective of bringing that volume to zero. China continues to import crude from Iran, despite the threat of US sanctions.
"We are having conversations with China, as well as any other counterparty on sanctions evasion," Mnuchin said today. He downplayed continued imports of Iranian crude into China, noting that "the Chinese state companies are not buying oil from Iran."
The two-day lag for the Treasury Department to come up with new sanction targets after Trump on 8 January said the US will impose sanctions "immediately" suggests the US is already running out of Iranian entities to penalize.
By Rye Druzin, Lora Stoyanova, Haik Gugarats and Chris Knight
Related news posts
Opec+, Saudis have no target oil price: sources
Opec+, Saudis have no target oil price: sources
Dubai, 26 September (Argus) — Neither Saudi Arabia nor the wider Opec+ group have any specific target for oil prices, and no member of the producers' alliance is about to abandon output discipline in favour of chasing market share, multiple Opec+ sources have told Argus . Oil prices fell earlier on Thursday following unconfirmed press reports that Saudi Arabia may be willing to tolerate lower oil prices as part of a plan to increase crude output to regain market share. Sources within Opec+ have since dismissed those assertions outright, insisting that the basis for the group's collective decision-making will always be market fundamentals, and in particular the five-year average of crude inventories, rather than targeting any particular oil price. "Neither Opec+, Opec nor the Saudis have any price target, let alone $100/bl," one source said, in response to a Financial Times report that stated Saudi Arabia is ready to "abandon its unofficial price target of $100/bl". A second source said the $100/bl figure being reported is not a target but is more likely to refer to a recent estimate issued by banks and other financial institutions of Saudi Arabia's "so-called break-even oil price" — that is, the price the kingdom needs to cover its spending plans. In April, the IMF estimated Saudi Arabia's breakeven oil price at $96.20 for 2024, almost 20pc above the previous year and around a third higher than current Ice Brent futures. "The breakeven is, at best, indicative, but does not tell the full story," the source said. Focusing on it "is totally devoid of the idea that a government has a host of other tools to manage an economy — issuing bonds, borrowing, adjusting one's budget". Eight Opec+ producers, led by Saudi Arabia and Russia, were due to begin a phased return of around 2.2mn b/d of "voluntary" output cuts from the start of next month. But mounting concerns over the strength of the global economy, and in turn oil demand, prompted the group to defer the plan by two months to December. With worries around oil demand not going away, and the market looking likely to flip into a surplus from the start of next year, some observers are questioning whether there will be any need for an increase in Opec+ supply from December. And if the eight members go ahead with unwinding the cuts regardless, whether that would signal a shift in the group's focus to chasing market share. But a third source rejected that view, as the group would "only be reversing what we have cut". "As a group, we have said time and time again that these cuts were both voluntary and temporary, and always stressed that they could be paused or reversed," the source said. "And earlier this month, that's exactly what we did with the two-month deferral to December." December or bust? The rationale to delay the increase in production to December was twofold, according to Opec+ sources. It not only reflected the uncertainty around the global economy, the US and Chinese economies, interest rates and demand. But more importantly, the decision was made to allow Opec+ members that have overproduced this year ꟷ namely Iraq, Kazakhstan and Russia ꟷ more time to show they are serious about compensating for exceeding their output targets. "There is so much uncertainty today which we, as Opec+, have no control over," one of the sources said. "But what we do control is our own affairs." Iraq and Kazakhstan have been under intense pressure in recent months to not only adhere to their pledged targets, but also compensate for past overproduction. While Kazakhstan did manage to produce below its target in August, Iraq continued to struggle. All eyes will be on how these countries do in September. "The overproduction is impacting our credibility, and we need to tackle that. Discipline is paramount," the source said. Reports that Saudi Arabia is committed to start unwinding cuts from December, come what may, are wide of the mark for several reasons, another source said. "First, this is not a decision for Saudi Arabia to make. It is for all eight to decide," he said. The group also still has several weeks before it has to decide whether to proceed with the plan, or defer again, the source added. A decision is due in the first week of November, by which time the group should have better visibility on market fundamentals and Iraqi and Kazakh compensation efforts. "How could we make a decision now when we don't even have September production figures?" the source said. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Italian service centres turn to secondary HRC
Italian service centres turn to secondary HRC
Milan, 26 September (Argus) — Italian steel service centres (SSCs) are turning to secondary hot-rolled coil (HRC) as they cannot move their higher-priced prime stock, market participants said on the sidelines of Italian association Assofermet's autumn conference in Milan today. SSCs are buying second-choice material as weak demand means sales of prime material are increasingly lossmaking. With EU mills refusing to cut production, although some have adjusted output, there has been an increased amount of second-choice coils offered in the market. This has allowed SSCs to continue selling processed material in a declining market, which one sheet seller said has been falling by around €10/t each week. While there are some restrictions to using second-choice HRC, such as not being able to meet every customer's request, SSCs can use it for some sales, minimising their losses. Some said SSCs have six months worth of inventory, and stocks will get a further boost from incoming imports in October, which will allow buyers to re-evaluate their stock gaps and establish what they need to purchase domestically. EU mill prices, having lost €47/t in Italy and €36.50/t in northwest EU since the start of September, according to Argus assessments, have prevented imports from being of interest to buyers. The Argus cif Italy HRC assessment has in comparison lost only €15/t since the start of the month. Today some market participants were talking about prices being close to the bottom, a sentiment that was previously seen in June and July, but did not materialise owing to an unexpected further slowdown in demand in September. But producers selling large quantities of second-choice coils, at prices that sources said can be as much as €100/t below costs, is not sustainable. The main issue in the flat steel sector remains a lack of demand, which unless there is an EU stimulus package, will continue weighing on prices, market participants said. By Lora Stoyanova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hurricane Helene shuts in 29pc of US Gulf oil
Hurricane Helene shuts in 29pc of US Gulf oil
New York, 25 September (Argus) — Hurricane Helene, which is forecast to intensify as it heads for a late Thursday landfall in Florida, has shut in about 29pc of US Gulf of Mexico oil output. Around 511,000 b/d of US offshore oil output was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 313mn cf/d of natural gas production, or 17pc of the region's output, was also off line. Operators have so far evacuated workers from 17 offshore platforms. Helene was last about 110 miles north-northeast of Cozumel, Mexico, according to a 2pm ET advisory from the US National Hurricane Center, with maximum sustained winds of 80 mph. Helene is expected to be a major hurricane, with winds of at least 111mph, when it reaches the eastern Florida coast on Thursday evening. "A turn toward the north and north-northeast with an increase in forward speed is expected later today through Thursday, bringing the center of Helene across the eastern Gulf of Mexico and to the Florida Big Bend coast by Thursday evening," the center said. Shell restarting some production Although the hurricane will largely pass to the east of most offshore oil and gas production areas, companies have taken precautionary measures. Given a shift in the forecast track, Shell said late Tuesday that it had started to ramp up production at the Appomattox platform to normal levels, and was in the process of restoring output at the Stones facility, both off the coast of Louisiana. It paused some drilling operations. Chevron said earlier it was shutting in production at company-operated facilities in the Gulf of Mexico, and evacuating all workers. Equinor said it was shutting down the Titan oil platform. BP had earlier this week started to shut in production at its Na Kika and Thunder Horse platforms, southeast of New Orleans, and was curtailing output from its Argos and Atlantis facilities, as well as removing non-essential staff. US offshore production was disrupted earlier this month when Hurricane Francine made landfall, with up to 42pc of production was offline at one point. The offshore Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US trucking index at 18-month high in August: ATA
US trucking index at 18-month high in August: ATA
Houston, 25 September (Argus) — US trucking freight volumes rose in August to the highest level since February 2023, the American Trucking Association (ATA) said. The ATA's seasonally adjusted Truck Tonnage Index (TTI) rose in August by 1.8pc from a month earlier and by 0.7pc from a year earlier. The index has increased on a monthly and yearly basis only twice in the past 18 months, last doing so in May 2024 . August's "robust gain" indicates freight levels are rebounding from a bottom, according to ATA economist Bob Costello. The TTI's month-to-month movement so far this year also shows the freight market is "at an inflection point," Costello said. The US trucking industry contracted in 2023 and initially got off to a slow start this year. Last week, the Federal Reserve cut its target lending rates for the first time in four years , suggesting the worst inflationary pressures may be over. The TTI is calculated monthly using a survey of ATA membership to estimate seasonally-adjusted trends in the value of US truck freight. Trucking comprises roughly three-quarters of tonnage carried by all modes of transportation in the US, and so can serve as an indicator of the health of the transportation sector and the economy at large. By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more