Trump’s Enforcement of Oil Sanctions on Iran: Is it Bullish?

The factors that reduced Iran's oil production and exports in 2019 do NOT exist today (with 4 charts)

It is the conventional wisdom right now that President Trump will enforce sanctions on Iran. Oil bulls think such enforcement would reduce Iran’s oil exports by more than 1 mb/d and raise oil prices. Their evidence is the sharp decline in Iran’s oil production and exports in 2019 after Trump, during his first term, imposed sanctions on Iran toward the end of 2018. In this Note we show that all the reasons that contributed to the reduction in Iran’s oil production and exports in 2019 do NOT exist today. Therefore, Trump’s enforcement of sanctions on Iran will have a limited impact on global oil markets, if any. In fact, enforcement of oil sanctions could be bearish for oil. Worth noting that all oil export numbers that have been reported in the media since 2019 were below actual exports. Some of the dark fleet shipments were not counted. Onshore exports were not counted.

2025 is not 2019