Easing of US Oil Sanctions Opens Brief Window for Iran Imports
(Bloomberg) -- The 60-day reprieve of US sanctions on Iranian oil, under an interim peace deal, has reopened the US market to the Middle Eastern country’s crude for the first time in 35 years.
The easing of sanctions, although brief, is a step toward the return of more normalized relations between the two nations, which have been at odds for nearly five decades. The Iranian supply could also alleviate the impact of the worst global oil disruption in history, but it’s unclear if US refiners will have the appetite to resume purchases again.
When American fuel-makers last imported significant volumes of Iranian oil, the shale boom was still decades away and the Soviet Union was intact, though only months away from collapse. The US was also a net importer of oil, relying heavily on supplies from OPEC countries.
The final barrels to enter the US before the 1995 oil embargo imposed by the Clinton administration went to fuel-makers in Texas, Louisiana and Mississippi. Chevron Corp and Marathon Petroleum Corp were among the last to import Iranian supplies in 1991, according to Energy Information Administration data. US refineries imported mostly medium sour oils from Iran, a variety that was scarce at the time.
The history of Iran as an oil supplier to the US changed irrevocably in 1979, when mounting political and civil unrest culminated with the Iranian revolution, driving Shah Mohammad Reza Pahlavi, an ally of the US, into exile.
American refineries immediately halted purchases of oil from Tehran after US President Jimmy Carter banned imports from the country. Volumes that peaked at 850,000 barrels a day in 1977 slumped to zero a few months after the rise of Ayatollah Ruhollah Khomeini.
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