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Abstract

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight economies (China, Greece, India, Italy, Japan, South Korea, Taiwan, and Turkey) to temporarily continue buying oil from Iran. Based on KAPSARC modeling of the political decision-making process, this Instant Insight – the first such KAPSARC publication – finds that the international community, and indeed some of the waiver economies, will at best partially comply with reinstated sanctions. China, India and Turkey are particularly unlikely to comply with U.S. sanctions and will maintain much of their current oil trade with Iran, the modeling shows.

The paper also simulates the likely impact on the global oil price of ending the waivers in four scenarios which show: i) no oil price rise if the sanctions don’t work at all, ii) an oil price rise of up to 12% by Q2 2020 if Iranian oil exports drop by an average 42%, iii) a 30%-plus price increase if the sanctions are 100% effective, and iv) no significant price change if Saudi Arabia offsets reduced Iranian crude oil exports by increasing its output and exports.

The analysis in the paper is based on two in-house models: the KAPSARC Toolkit for Behavioral Analysis (KTAB) and the KAPSARC Global Energy Macroeconometric Model (KGEMM).

Authors

Carlo Andrea Bollino

Visiting Researcher Carlo Andrea is a visiting researcher at KAPSARC, a professor of economics at the University of Perugia, and a professor of energy economics… Carlo Andrea is a visiting researcher at KAPSARC, a professor of economics at the University of Perugia, and a professor of energy economics at the University Luiss, Rome. He has been the president of the Italian Association for Energy Economics since 2014 and was the president of the International Association for Energy Economics in 2008. His other roles have included energy advisor to Italy's minister of industry, president of the Italian Electric Transmission Network, chief economist at Eni, economist at the Bank of Italy, research associate at United Nations' Project LINK, and lecturer and professor of economics at the universities of Pennsylvania (United States), Campobasso, Sassari and Urbino (Italy). Carlo Andrea's research investigates econometric modeling, consumer behavior, energy markets, sustainable and renewable energy, liberalization and regulation policy. He has authored over 200 scientific articles, is the chief editor of the Review of Economics and Institutionsand a member of the editorial board of Energies.

Expertise

  • Econometric modeling
  • Consumer behavior
  • Energy markets
  • Sustainable and renewable energy
  • Liberalization and regulation policy

Publications See all Carlo Andrea Bollino’s publications

Brian Efird

Program Director Dr. Brian Efird is the program director for Policy and Decision Science. He manages a multidisciplinary, multi-national team of researchers… Dr. Brian Efird is the program director for Policy and Decision Science. He manages a multidisciplinary, multi-national team of researchers who work on quantitative models of collective decision-making processes (CDMP), geospatial information system applications to energy economics and energy policy, demography and energy, and energy policy studies of countries in the Gulf Cooperation Council (GCC) region. Dr. Efird is co-editor-in-chief of a new journal from Springer Scientific called Energy Transitions. He was previously a senior research fellow at the National Defense University in Washington, D.C.; a consultant on defense and international security matters in Washington; and a consultant applying quantitative models to support corporate, investment banking, and legal negotiations in New York.

Expertise

  • Behavioral modeling
  • Geopolitics
  • Defense and national security studies
  • Human geography
  • Strategic communication

Publications See all Brian Efird’s publications

Fakhri Hasanov

Research Fellow Fakhri is a research fellow leading the KAPSARC Global Energy Macroeconometric Model (KGEMM) project. Previously, he was an associate professor… Fakhri is a research fellow leading the KAPSARC Global Energy Macroeconometric Model (KGEMM) project. Previously, he was an associate professor and director of the Center for Socio-Economic Research at Qafqaz University, Azerbaijan. He has served as a deputy director of the Research Institute at the Ministry of Economic Development, and a senior economist at the Research Department of the Central Bank of Azerbaijan Republic. He received a Fulbright Post-Doctoral Scholarship and conducted a research on building and applying a macroeconometric model for policy analysis at the George Washington University. Fakhri is a member of the research program on forecasting at the George Washington University and the editorial board of the Asian Journal of Business and Management Sciences. His research interests and experience span econometric modeling and forecasting, building and applying macroeconometric models for policy purposes, energy economics with a particular focus on natural resource-rich countries.

Expertise

  • Applied macroeconometrics
  • Energy economics
  • Time series modeling and forecasting

Publications See all Fakhri Hasanov’s publications

Emre Hatipoglu

Research Fellow Emre Hatipoglu’s research connects political science to the study of energy markets. Before joining KAPSARC as a research fellow, he… Emre Hatipoglu’s research connects political science to the study of energy markets. Before joining KAPSARC as a research fellow, he was an associate professor at the Faculty of Arts and Social Sciences, Sabancı University, Istanbul, where he was the program coordinator of the International Studies (B.A.), Conflict Analysis and Resolution (M.A.) and European Studies (M.A.) programs between 2013-2017. He was also a visiting Fulbright scholar at the Sakip Sabancı Center for Turkish Studies, Columbia University, during the 2017-2018 academic year. Emre’s research has been published in the Journal of Politics and Foreign Policy Analysisand International Studies Perspectives, among others. He is the co-host of the KAPSARC Global Energy Relations Dataset Project.

Expertise

  • Geopolitics
  • Economic Sanctions
  • Foreign policy

Publications See all Emre Hatipoglu’s publications

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