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John Hofmeister, Shell Oil’s former U.S. CEO, told CNBC that looming EU sanctions aimed at punishing Iran for continuing its nuclear program will be “a non-event.”
On July 1, the EU will ban oil imports from Iran and will prohibit the insuring of ships carrying the country’s crude.
“It’s just a headline,” Hofmeister told “ Power Lunch .” “It sounds like tough talk, but the reality is there’s almost no substance to the policy.”
Oil is a global commodity and it will find its market wherever it goes, said Hofmeister, founder and CEO of the nonprofit Citizens for Affordable Energy. He doesn’t expect the sanctions to have much impact on oil prices, which have been falling ahead even with sanctions looming. U.S. light, sweet crude is now trading at its lowest levels in nearly eight months .
Strong production has been partly behind the recent weakness in crude. “There’s plenty of oil out there,” Hofmeister said. “And even if Iran’s oil isn’t purchased by as many customers, the Obama administration has basically eviscerated its own efforts to harm Iran by granting waivers.” He also said he can’t imagine the U.S. administration stopping China from buying Iranian oil.
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