The market had largely expected that President Trump would refuse to waive the sanctions on Iran this time around, and after an earlier dip on Tuesday, oil prices jumped after the announcement that the US was walking away from the deal.
The "threat" references the occasional missile attack from Yemen, a country that Saudi Arabia has blockaded and bombed into a situation of dire instability and poverty for over three years.
Yemeni armed forces, supported by popular committees, fired Wednesday night a ballistic missile at the headquarters of Saudi Information and Electronic Warfare in Najran, southern Saudi Arabia.
But a drop in Iranian exports due to a return of US sanctions, plus involuntary supply losses in other OPEC members such as Venezuela, would mean the supply cut would be significantly larger than intended. In an interview in mid-March, Saudi Crown Prince Mohammed bin Salman warned: "Without a doubt, if Iran developed a nuclear bomb, we will follow suit as soon as possible".
The same source went on to add that Saudi Arabia will not fill the gap on its own, but is working on possible solutions with the United Arab Emirates (the UAE is the current holder of the OPEC presidency for 2018) and Russian Federation (as a party to the agreement between OPEC and non-OPEC oil producers).
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The U.S. advised countries that want to avoid sanctions on their financial institutions to reduce their volume of crude purchases from Iran during a 180-day wind-down period.
Meanwhile, European allies sought to salvage the worldwide nuclear pact with Iran.
"Iran is subject to the world's most robust nuclear verification regime" and that the 2015 Joint Comprehensive Plan of Action (JCPOA) was "a significant verification gain", Yukiya Amano, director-general of the International Atomic Energy Agency (IAEA) reiterated in a statement.
The Bahrain News Agency, BNA, quoted a statement of the Ministry of Foreign Affairs as saying, "This decision reflects the commitment of the United States to confront Iranian policies and Iran's continuous attempts to spread terrorism in the region in full violation of global norms and laws".
Riyadh, which leads a regional coalition that intervened in Yemen's civil war to fight the Huthis, accuses Iran of supplying the militia with ballistic missiles.
Both the Houthi movement and Iran deny any military con nection-but are politically aligned in regional affairs. The two countries are negotiating a nuclear-cooperation agreement but a sticking point has involved whether the Saudis will agree to forego dual-use technologies that can be used to produce either nuclear energy or nuclear weapons. However, it traditionally neither confirms nor denies their existence.