The U.S. State Department laid down the gauntlet as the U.S. threatened to slap sanctions on countries and companies that don’t cut oil imports from Iran to “zero” by November 4th. That’s right, zero, zip, nada you name it. There will be no waivers granted at this point and the U.S. is going to issue penalties to those that decide to buy Iranian oil. This will put the screws to the Iranian regime that is already facing a new upstart of protests from some Iranians who are sick and tired of the poor economic conditions in the republic. The Trump Administration move will not only isolate the rogue regime but could cause a collapse of its economy that is already under severe pressure due to mismanagement, and the funding of wars in Syria and Yemen, not to mention the funding of other terrorist organizations. 

This comes right after Saudi Arabia pledged to ramp up output in July to a record 10.8 million barrels a day, though some reported that they could produce close to 11 million barrels a day. The Saudis are saying that they won’t exceed their quota and they will put the extra oil in storage but the timing of this suggests that the Saudi’s are getting ready to help keep the market supplied at a time when it will be tight due to the sanctions and the coming collapses of what’s left of the Venezuelan oil industry. The move is most likely in anticipation of the U.S. sanction on Iran that will severely tighten global supply, even though it was announced ahead of the State Department Action.

This move is going to put more economic pressure on the Iranian regime than we have already seen. Almost no one will stand by Iran despite the EU’s hope that they could keep the Iranian nuclear deal intact. Oil companies and many countries will not want to face the possibility of U.S. wrath. The State Department official said allies in Europe and Asia already had been warned, and trips to China, India and Turkey were in the works according to the Wall Street Journal.