That determination was required under the sanctions law Obama signed New Year’s Eve. With that decision, the sanctions law will take effect June 28. Banks that process oil payments for Iran will then be cut off from access to the American banking system—unless their governments have been given a waiver for having “significantly” reduced their purchases of Iranian oil.
The White House announcement began by recognizing some of the negative points since Obama signed the sanctions law. “The oil market became increasingly tight over the first two months of 2012,” the White House statement said. “That tightness remains today. A series of production disruptions in South Sudan, Yemen, Nigeria and the North Sea have removed oil from the market. In addition, international concerns over Iran’s nuclear activities and recent steps taken to reduce the amount of Iranian crude oil and petroleum product imports are contributing to an increasing demand for non-Iranian crude oil.”
But the statement then turned positive. “Nonetheless, there currently appears to be sufficient supply of non-Iranian oil to permit foreign countries to significantly reduce their import of Iranian oil, taking into account current estimates of demand, increased production by some countries, private inventories of crude oil and petroleum products, and available strategic petroleum reserves and, in fact, many purchasers of Iranian crude oil have already reduced their purchases or announced they are in productive discussions with alternative suppliers.”
The statement attached no numbers to any of these observations and was surprisingly bland. The statement also avoided mentioning that the price of an OPEC barrel has risen $14 or 13 percent since Obama signed the new sanctions bill into law.
The law requires the president to make a determination by March 30 and every six months thereafter that enough oil is on the market to do without Iranian oil.