U.S. President Donald Trump said on Tuesday that China can continue to purchase Iranian oil after Israel and Iran agreed to a ceasefire, a move that the White House clarified did not indicate a relaxation of U.S. sanctions.

"China can now continue to purchase Oil from Iran. Hopefully, they will be purchasing plenty from the U.S., also," Trump said in a post on Truth Social, just days after he ordered U.S. bombings of three Iranian nuclear sites.

Trump was drawing attention to no attempts by Iran so far to close the Strait of Hormuz to oil tankers, as a closure would have been hard for China, the world's top importer of Iranian oil, a senior White House official told Reuters.

"The president continues to call on China and all countries to import our state-of-the-art oil rather than import Iranian oil in violation of U.S. sanctions," the official said.

After the ceasefire announcement, Trump's comments on China were another bearish signal for oil prices, which fell nearly 6% on Tuesday.

Any relaxation of sanctions enforcement on Iran would mark a U.S. policy shift after Trump said in February he was re-imposing maximum pressure on Iran, aiming to drive its oil exports to zero, over its nuclear program and funding of militants across the Middle East.

Trump imposed waves of Iran-related sanctions on several of China's independent "teapot" refineries and port terminal operators for purchases of Iranian oil.

"President Trump's greenlight for China to keep buying Iranian oil reflects a return to lax enforcement standards," said Scott Modell, a former CIA officer, now CEO of Rapidan Energy Group.

In addition to not enforcing sanctions, Trump could suspend or waive sanctions imposed by executive order or under authorities a president is granted in laws passed by Congress.

Trump will likely not waive sanctions ahead of coming rounds of U.S.-Iran nuclear talks, Modell said. The measures provide leverage given Tehran's demand that any deal includes lifting them permanently.

Jeremy Paner, a partner at law firm Hughes Hubbard & Reed, said if Trump chooses to suspend Iran oil-related sanctions, it would require lots of work between agencies.

The U.S. Treasury would need to issue licenses, and the State Department would have to issue waivers, which require Congressional notification.

Oil traders and analysts in Asia said they did not expect Trump's comments to have a near-term impact on Chinese purchases of oil from either Iran or the U.S.

Iranian oil accounts for roughly 13.6% of China's oil purchases this year, with the discounted barrels providing a lifeline to margin-squeezed independent refineries. U.S. oil accounts for just 2% of China's imports, and Beijing's 10% tariffs on U.S. oil deter further purchases.

PRESSURE ON CHINA

China has long opposed what it has called Washington's "abuse of illegal unilateral sanctions."

Guo Jiakun, a spokesperson for China's foreign ministry, said on Wednesday that China would adopt reasonable energy security measures in accordance with its own national interests, when asked about the Trump post at a regular press briefing.

Larger purchases of Iranian oil by China and other consumers could upset U.S. ally Saudi Arabia, the world's largest oil exporter.

The impact of U.S. sanctions on Iran's exports, however, has been limited since Trump's first administration when he cracked down harder on Tehran.

Trump has "flashed the Glock" this year with sanctions on Chinese trading companies and terminals, Modell said, referring to threatening with a gun. But the results have been far more "minimum pressure" than maximum, Modell added.

State Department spokesperson Tammy Bruce told reporters that Trump had signaled what he wanted to happen and that his administration is focused on delivering that. She would not say what the process would entail.

"But clearly we are focused on making sure that (the) guiding hand of President Trump prevails and moves this government forward, so we will have to wait and see when it comes to what that ends up looking like," Bruce said.

++++++++++++++++++++++++++++++++++++++++++

Oil prices in flux around the world

The price of crude oil stabilized on Monday after Iran’s limited retaliation against U.S. strikes on Iran’s nuclear site and hopes Iran doesn’t disrupt the global flow of oil.

Economists feared Iran could try to squeeze the world’s supply of oil or block the Strait of Hormuz. 20% of the world’s daily oil passes through that strait, from Iran and other gulf countries.

Iran’s parliament voted on Sunday to close the Hormuz Strait, according to an Iranian state media report, but the report said the final decision rests with Iran’s Supreme National Security Council.

“The Iranian regime would be foolish to make that decision,” said White House Press Secretary Karoline Leavitt.

If Iran chooses to close the strait, economists warned the price of crude oil could climb to $120-$130, and the national average for gas would rise to $4.50.

“Whatever happens, gas prices are likely to increase,” said Dr. Robert Weiner, a professor who studies the effects of crisis on oil prices at the George Washington University School of Business. “When you have active conflict, nobody can really predict where things are going.”

The U.S. is the world’s largest oil producer but wouldn’t lose much of its oil supply if the Strait of Hormuz closed.

“It doesn’t matter if we get any oil from the strait or not,” Weiner said. “What matters is that it would reduce the world oil supply. And the only way to deal with that is everybody’s going to raise prices.”

President Donald Trump told oil companies on a post on Truth Social to “KEEP OIL PRICES DOWN. I’M WATCHING!” He encouraged the Department of Energy to “DRILL, BABY, DRILL!!! And I mean NOW!!!”

“The ability of the United States or any other country to increase production rapidly is very, very limited,” Weiner said. “Production changes very slowly.”

Iran sells most of its oil to China. U.S. officials asked China to urge Iran not to retaliate using the global oil market.

+++++++++++++++++++++++++++++++++++++++++++++

Trump calls for producers to pump more oil amid Iran shipping lane fears

President Donald Trump called for the US and other oil-producing economies to pump more oil as crude prices remain volatile following strikes on Iranian nuclear facilities.

Mr Trump urged stepped-up production as the White House sharpened its warnings to Iran against closing the Strait of Hormuz, a vital oil and gas shipping lane, in retaliation for the US strikes on Iran’s nuclear programme.

“To the Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!” Mr Trump posted on social media.

He added: “EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!”

The push by Mr Trump comes at an uncertain moment as US embassies and military installations in the Middle East are on high alert for potential retaliation.

Global markets are trying to ascertain what lays ahead after the US struck key Iranian nuclear facilities with a barrage of 30,000-pound bunker busting bombs and Tomahawk missiles.

Iran’s parliament has approved cutting off the Strait of Hormuz, a narrow shipping lane in the Persian Gulf that about 20% of global oil and gas passes through.

It is now up to Iran’s national security council to decide whether to move forward with the idea, which could lead to a spike in the cost of goods and services worldwide.

The price of oil jumped 4% shortly after trading began on Sunday night, but it quickly pared back as the focus shifted from what the US military did to how Iran would react.

Oil futures were flip-flopping in Monday morning trading between gains and losses. They still remain higher than they were before the fighting began a little more than a week ago.

White House press secretary Karoline Leavitt warned Tehran anew against closing the strait, saying “the Iranian regime would be foolish to make that decision”.

The State Department has doubled the number of emergency evacuation flights it is providing for American citizens wishing to leave Israel, and ordered the departure of nonessential staff from the US Embassy in Lebanon.

It also is stepping up travel warnings around the Middle East because of concerns Iran will retaliate against US interests in the region.

In an alert sent to all Americans worldwide and posted to its website on Sunday, the State Department warned all US citizens abroad to exercise caution.

The US Embassy in Qatar issued an alert on its website on Monday urging American citizens in the energy-rich nation to “shelter in place until further notice”.

Hours later, the Qatari government issued an extraordinary order to shut its busy airspace.

Qatar, across the Persian Gulf from Iran, is home to Al Udeid Air Base, which hosts the forward headquarters of the US military’s Central Command.

Many energy industry analysts are sceptical that Iran would go forward with a full closure of the strait, something that it has threatened to do in the past.

Iran would face the possibility of retaliation against its own shipments and the possibility that the move would upset China, the biggest purchaser of Iranian crude.