US may target Iranian crude, strategist warns

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Washington is likely to tighten crude oil sanctions against Tehran over Iran’s alleged support for the Palestinian militant group Hamas, head of global commodity strategy at RBC Capital Markets Helima Croft has said.

Talking to CNBC on Wednesday, Croft suggested that the West and the Biden administration would, “at a minimum,” consider curbing Iranian energy exports as a retaliatory measure.

Croft’s comments come as US Senator Lindsey Graham has warned Tehran that the American military could target its oil industry in response to any escalation in the Middle East. The lawmaker said he would put forward a resolution to this effect, citing concerns that the Tehran-backed, Lebanese Shia group Hezbollah could join the fighting between Israel and Hamas.

“The argument is, can you continue to allow Iran to keep the bank open for groups like Hamas?” Croft said. According to her estimates, Iranian oil exports are now approaching levels last seen before 2018, when former US President Donald Trump’s administration reimposed restrictive measures.

“So, I think the Biden administration is going to have to tighten those sanctions,” she projected, adding that the measures could come into effect soon.

President Biden has previously warned Tehran to “be careful,” but acknowledged at the same time that “at this point” there is “no clear evidence” that Iran helped Hamas carry out its attack on Israel. 

The Middle East found itself in the throes of new violence on October 7, when the Palestinian armed group launched a surprise attack on Israel, with ensuing fighting resulting in thousands of deaths. Israel has launched an unprecedented bombardment of Gaza in retaliation for the incursion. The UK-based aid group Save the Children reported on Monday, citing figures from the Hamas-operated Health Ministry in Gaza, that at least 5,087 people have been killed in Israel’s siege of the enclave since then, including at least 2,055 children.

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