In November 2018, when the U.S. president announced withdrawing from the 2015 nuclear accord between the Islamic Republic and six world powers, he made another announcement saying that the U.S. is going to cut Iranian oil exports to zero!

The sanctions targeted Iran’s oil sector, financial transactions and banks, as well as shipping and ship-building industries in order to cut off the country’s revenue sources and to make Trump’s announcement come true.

However, shortly after Trump’s blatant remarks, Secretary of State Mike Pompeo announced that the United States has granted exemptions to eight countries allowing them to temporarily continue buying Iranian oil.

Clearly Trump hadn’t included the importance of Iranian oil for the market balance in his calculations. In the absence of Iranian oil in the market, the prices skyrocketed and that unleashed a wave of panic among the U.S. gasoline consumers which were facing prices going up.

On the other hand, Saudi Arabia which had been under Trump’s tweet bombarding since April 2018, for cutting oil production, pushed back at him and went on with the plan for extending the OPEC+ cuts deal.

The market statistics were all against Trump’s visions and that made him retreat for the time being, adjourning the execution of the “zero Iranian oil” for a six-month period.

Now, with the waivers expiration due nearing, once again Trump is facing a dilemma regarding his Iran policies.

Earlier in April, Saudi Arabia’s Energy Minister Khalid al-Falih noted that OPEC was leaning toward an extension of the production cuts after June.

He also mentioned Trump’s tweet from earlier that month in which he called on OPEC “to take it easy,” al-Falih told CNBC on the sidelines of an OPEC symposium in Riyadh that “We are taking it easy.”

The possibility of an extension on the OPEC+ cuts deal is very high and that means the traders would be expecting a much tighter market in the Q3 and Q4 2019. With the U.S. sanctions on Venezuela and disruptions in Libya added to the equation, the prices could go as high as $100.

The situation has put Trump in a very difficult position, if he agrees to extend waivers on Iran; that would be a clear acceptance of defeat and admitting to the fact that Iranian oil could not be wiped out of the market without huge consequences.

On the other hand, if he doesn’t allow the exempted countries to keep buying Iranian oil, he would actually be adding yet another factor to the oil market’s already bullish nature.

A more likely scenario is that the waivers will be extended only for some of the exempted countries and most probably the European countries won’t be included in the new round of waivers due to the current trade war between the U.S. and Europe.

Considering this scenario, Iranian oil exports won’t fall much from their current levels, since most of the recent raises in the county’s exports has been due to the increase in shippings to Asian buyers.

Trump has until early May to decide whether to grant new waivers to eight countries — China, India, Japan, Turkey, Italy, Greece, South Korea and Taiwan — that were exempted from sanctions on Iranian oil imports.