Oil prices slip but score second straight weekly gain

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So, what happens next?

In other sectors, French carmaker PSA Peugeot Citroen agreed in 2016 to open a plant producing 200,000 vehicles annually in Iran, and says it is studying the implications of the USA move.

While he has committed to remaining in the nuclear agreement, French President Emmanuel Macron floated the idea of a supplemental deal on Iran during a recent visit to Washington. If history is any guide, there is little chance of this happening, so we are now on a course of escalating confrontation. Reuters reported, citing an unnamed source in OPEC, that Riyadh is looking into possibilities of filling the likely gap in oil production consequent to the resumption of USA sanctions against Tehran. However, there is a great deal of disagreement and uncertainty over how quickly and how severely the impact of USA confrontation will be.

Even without disruption to Iran's crude flows, the balance between supply and demand in the oil market has been tightening steadily, especially in Asia, with top exporter Saudi Arabia and No.1 producer Russian Federation having led efforts since 2017 to cap output to prop up prices. The EU, China and Russian Federation have said they are sticking with the deal.

Immediately after President Trump's announcement, the U.S. State Department said the new sanctions will include measures aimed at Iran's oil and shipping sectors, with a six-month "wind down" period "to allow companies to end contracts, terminate business, (and) get their money out".

Directly and indirectly, these sanctions will impact on those who deal in Iranian oil, insure Iranian crude oil cargoes, underwrite tankers in Iranian waters, and on the National Iranian Tanker Company (NITC).

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The price of oil rose sharply on Wednesday to its highest since 2014 on expectations that the new sanctions will crimp Iranian energy exports.

Surging oil prices mean the big Arab countries of the Gulf - especially Saudi Arabia - look set to gain financially as well as politically from US President Donald Trump's decision to pull out of the Iran nuclear deal.

The big question at this point is how disruptive unilateral sanctions from the USA will be to Iranian oil flows. A Chinese oil company also has a deal to develop the country's massive South Pars offshore natural gas field.

The news agency Bloomberg, citing Amrita Sen, chief oil analyst at Energy Aspects Ltd., noted that the renewal of Iranian sanctions can drastically change the agenda for the upcoming OPEC meeting in June. Much of the reason for that stems from the Obama administration's deal with Tehran.

Guterres told the BBC that the Iran agreement was an "important diplomatic victory" and should be maintained. The cartel - led by Saudi Arabia - and 10 outside producers, including Russian Federation, have been holding back crude output by around 1.8 million barrels a day since the start of 2017.

Already, many European countries and others are also protesting the U.

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