The US is likely to turn a blind eye to sanctioned Iranian oil as it tries to lower gas prices, leading trader Vitol says

• The US is likely to turn a blind eye to the trading of sanctioned Iranian oil ahead of the midterms, a top trader has said.
• A Vitol executive said he thinks governments are unlikely to reach a new nuclear deal but Iranian exports may increase anyway.

The US is likely to start turning "a blind eye" to the sale of sanctioned Iranian oil as the White House scrambles to bring down gas prices, according to an executive at Vitol, the world's leading energy trader.

Mike Muller, head of Asia at Vitol, said on a podcast on Sunday that global governments are unlikely to agree upon a new Iranian nuclear deal any time soon, meaning the tough oil restrictions on the country are set to continue.

Iran has the capacity to produce some 3.8 million barrels of oil per day, according to the International Energy Agency. At the last count, it produced 2.55 million barrels per day in March, IEA data shows. Prior to the introduction of sanctions, it would export just over 2 million barrels per day, according to the Joint Organisations Data Initiative.

Muller said traders may start to see more oil coming from Iran on to the market anyway.

"If the midterms are dominated by needing to keep gas prices low in America, turning a somewhat greater blind eye to the sanctioned barrels flowing out, and competing with Russia for that matter, is probably something that you might expect to see," Muller told the Gulf Intelligence podcast.

"There's a chance that Uncle Sam might just allow a little bit more of that oil to flow," Muller said. Insider had contacted the US Treasury for comment.

Gas prices have shot upwards in recent months as crude has rocketed on the back of Russia's invasion of Ukraine in late February.

WTI crude, the US benchmark oil price, has risen almost 60% this year to trade at around $118 a barrel Monday.

Meanwhile the US national average gas price has jumped to a record high of $4.865 a gallon as of Monday, according to the AAA.

US President Joe Biden has argued the jump in prices are out of his control, but they nonetheless pose a grave danger to Democratic chances at the midterm elections in November.

The White House is increasingly turning to major oil-producing countries to encourage them to increase supplies.

The Biden administration has given the green light for European companies to begin moving Venezuelan oil to Europe, Reuters reported Sunday, citing five people familiar with the matter.

It comes as the EU thrashes out a deal to ban 90% of Russian crude imports by the end of the year as part of its sixth round of sanctions.

Biden himself is expected to travel to Saudi Arabia for high-level talks in the next two months, according to reports.

Read more: Goldman Sachs is bullish on real assets as the stock market slumps — analysts spell out why and reveal which ones are set to rise in value the most