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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

Carlo Andrea Bollino

Visiting Researcher Carlo Andrea is a visiting researcher who currently works as a professor of economics at the University of Perugia, and a professor…

Expertise

  • Econometric modeling
  • consumer behavior
  • energy markets
  • sustainable and renewable energy
  • liberalization and regulation policy

Publications See all Carlo Andrea Bollino’s publications

Iran Sanctions: Implications for the Oil Market

Iran Sanctions: Implications for the Oil Market

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

May 9, 2019
Estimating the Household Consumption Function in Saudi Arabia

Estimating the Household Consumption Function in Saudi Arabia

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

February 5, 2019
Brian Efird

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…

Expertise

  • Behavioral modeling
  • geopolitics
  • defense and national security studies
  • human geography
  • and strategic communication

Publications See all Brian Efird’s publications

Energy Governance in China: The Structures and Processes of Government Decision-Making

Energy Governance in China: The Structures and Processes of Government Decision-Making

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

May 14, 2019
Iran Sanctions: Implications for the Oil Market

Iran Sanctions: Implications for the Oil Market

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

May 9, 2019
Fakhri Hasanov

Fakhri Hasanov

Research Fellow Fakhri is a research fellow leading the KAPSARC Global Energy Macroeconometric Model (KGEMM) project. Previously, he was an associate professor…

Expertise

  • Applied macroeconometrics
  • energy economics
  • time series modeling and forecasting

Publications See all Fakhri Hasanov’s publications

Iran Sanctions: Implications for the Oil Market

Iran Sanctions: Implications for the Oil Market

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

May 9, 2019

Estimating the Impact of Energy Price Reform on Saudi Arabian Intergenerational Welfare using the MEGIR-SA Model

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

April 1, 2019
Emre Hatipoglu

Emre Hatipoglu

Visiting Researcher Dr. Hatipoglu has been a visiting researcher at KAPSARC since July 2018. He is associate professor at the Faculty of…

Expertise

  • Economic sanctions
  • energy politics
  • foreign policy
  • and research design

Publications See all Emre Hatipoglu’s publications

Iran Sanctions: Implications for the Oil Market

Iran Sanctions: Implications for the Oil Market

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

May 9, 2019
Turkey and the EU: Energy, Transport and Competition Policies

Turkey and the EU: Energy, Transport and Competition Policies

United States (U.S.) Iran energy sanction waivers expired May 2, 2019. The waivers permitted eight…

May 1, 2016
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