US Secretary of State Mike Pompeo will travel to India next week, but will offer no relief from oil sanctions to what was a top Iranian export market just two months ago, a senior State official said Friday.
"I think the administration has been very clear that this is the time to keep pressure on Iran, and certainly with the backdrop of the last several days, to ensure that Iran understands it needs to stop its destabilizing behavior in the region," the official said in a background call with reporters.
Pompeo will meet next week with Prime Minister Narendra Modi and Minister of External Affairs Subrahmanyam Jaishankar before heading to a G-20 meeting in Japan later in the week.
The State official said the Trump administration has worked to boost global supply as sanctions waivers expired in May.
"We've worked closely over the course of the last several months to ensure that sufficient oil supply is available to our partners, and the US for its part has dramatically increased its crude oil production and will continue to do so," the official said. "And at the same time, other key suppliers have also stepped in."
President Donald Trump spoke Friday with Saudi Arabian Crown Prince Mohammad bin Salman, which sources said likely touched on Saudi production amid the growing conflict between the US and Iran.
"The two leaders discussed Saudi Arabia's critical role in ensuring stability in the Middle East and in the global oil market," the White House said in a statement. "They also discussed the threat posed by the Iranian regime's escalatory behavior."
Iranian crude oil and condensate exports, which averaged about 1.7 million b/d in March, fell to about 1 million b/d in April and an estimated 800,0000 b/d in May, according to data from cFlow, Platts trade flow software and shipping sources. The majority of those flows in May were to China, Turkey, and Syria, according to these sources.
India accounted for 23% of Iran's first-quarter crude oil shipments, but these imports have dropped to effectively zero, sources said.
On Friday morning, Trump tweeted that the US had prepared a strike against Iran on Thursday night, but he called it off with 10 minutes to spare.
"Sanctions are biting & more added last night," Trump tweeted.
Sources said it was unclear what sanctions may have been added.
"I think he's just referring to the series of escalating sanctions measures that the US had planned," said Elizabeth Rosenberg, director of the energy program at the Center for a New American Security and a former senior sanctions adviser at the Department of the Treasury.
In a note Thursday, Paul Sheldon, chief geopolitical adviser with S&P Global Platts Analytics, wrote that military action by the US remained unlikely.
"The administration will more likely try to convince the international community of the need for tougher sanctions," Sheldon said. "However, with oil sanctions waivers already eliminated and the EU and UN Security Council still supporting the nuclear deal, few economic cards are left to play. This creates a delicate balance, given the massive economic pressure on Iran, an absence of diplomatic channels and Iran's reluctance to engage with President Trump."
The aborted US strike Thursday night followed Iran shooting down an unarmed, unmanned drone over the Gulf of Oman, according to the US.
Two oil tankers were attacked last week just outside the Strait of Hormuz, with the US, UK, and Saudi Arabia blaming Iran. A similar attack off the eastern UAE port of Fujairah occurred a month earlier. Iran, which previously threatened to shut down traffic through the strait if US sanctions blocked its oil exports, has denied responsibility.
