Donald Trump has choked off more oil supply than Opec has tried to cut

London — Donald Trump often assails Opec for pushing up oil prices with production curbs, but in 2019 the US president has banned more crude supplies than the cartel has pledged to cut.

Last week Trump once again called for an increase in crude output from the oil cartel, which in tandem with partners has committed to removing 1.2-million barrels a day in a bid to shore up prices.

Yet as tougher US measures against Iran take effect this week, coming on top of action against Venezuela, the president’s own attempts to choke off supplies exceed those intended by Saudi Arabia and its allies.

Trump has been pressuring Iran since he quit an accord overseeing the nation’s nuclear programme a year ago, and the tighter sanctions will expose any country buying Iranian crude to US penalties. That theoretically bans about 1.4-million barrels a day of exports, though analysts say the effect will be less severe as top buyer China may flout the embargo.

The squeeze on Iran follows a ban on US oil imports from Venezuela announced in January, as Trump punishes the regime of Nicolas Maduro for allegedly rigging elections and plundering national resources. US purchases from Venezuela had been running at about 530,000 barrels a day.

Taken together, the block on just more than 1.9-million barrels of daily output surpasses the 1.2-million reduction targeted by Opec. Iran and Venezuela, the two nations in Trump’s crosshairs, are exempt from Opec’s agreement to reduce output.

In practice, the Opec nations have deliberately cut more than planned as group leader Saudi Arabia deepened its curbs. Because of this, and the losses in Iran and Venezuela, the group’s overall production has slumped by almost 1.7-million barrels a day in 2019.

That’s still eclipsed by the effect of Trump’s interventions if the sanctions he imposed on Iran in 2018 are included. Adding those measures, the amount of oil banned by the president swells to about three-million barrels a day.

Bloomberg