White House economist plays down panic over Iran sanctions

White House economist plays down panic over Iran sanctions

/ Policy & Regulations / Monday, 29 April 2019 08:57


The economic advisor to the White House Larry Kudlow has moved swiftly to dispel fears that their latest sanctions on Iran will significantly disrupt the US economy.


The US decided to impose fresh sanctions on Iran in an effort to increase further pressure on them and reduce their oil exports to zero. The US decided to remove six-month waivers it had in place for China, India, Turkey, Japan, South Korea, Taiwan, Italy and Greece in relation to their oil dealings with Iran.


Those countries now run the risk of being hit with sanctions if they continue to buy oil from Iran. The move by the US has sparked a frenzy of panic amongst many economists and industry watchdogs who believe it will destabilize the oil market and in turn disrupt the global economy.


However, a bullish Kudlow rejected those concerns and dismissed any fears it would have a big impact.


He said, “The decision to tighten sanctions on Iran will have no material impact on oil prices given the large US supply of petroleum.  We are a country awash with oil and gas. We don't see any palpable impact.


In response to the US sanctions on Iran, Saudi Arabia which is the de-facto leader of the powerful intergovernmental organization OPEC said that it would strive to ensure the oil markets remain stabilized.


Kudlow added that if prices did increase then US producers have the ability to quickly ramp up shale oil production to increase supply in response. Even so, Brent North Sea crude reaching $74.70 per barrel on Tuesday, the highest point since early November, before falling back slightly. The US benchmark WTI hit a similar near six-month high at $66.45.


In addition to this, Kudlow also said first quarter economic growth is coming in much better than many of us feared," and reiterated that GDP should expand by three percent for the next two years, given the very low inflation despite record low unemployment rates.



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