Oil seesaws on reported Iran sanction waivers, US-China trade hopes

Oil seesaws on reported Iran sanction waivers, US-China trade hopes

Indian public refineries like Mangalore has also been buying Iranian oil but not in the numbers that they were earlier. Through April, South Korea had imported an average of 300,000 bpd of Iranian oil, but in the months since Trump's decision, it tapered those purchases in anticipation of the sanctions.

US President Donald Trump announced in May America's withdrawal from the Iran nuclear deal, warning that any countries or companies that conduct transactions with Tehran could face secondary sanctions.

"Thus far, potential waivers appear targeted at India and South Korea, and they require some reductions over current import volumes while still allowing oil to flow", he said.

Bloomberg reported that close US allies South Korea and Japan had received waivers along with India, which relies heavily on supplies from Iran.

The official told Bloomberg that waivers were aimed at preventing oil price hikes and would be granted in exchange for continued import cuts.

He noted that the United States sanctions are aimed at covering the country's failure in the economic sector and said Iran has the capability and knowledge to manage its economic affairs and the nation's living conditions. These sanctions are a pressure tactic to constrain Iran's nuclear programme. But we are prepared to work with countries that are reducing their imports on a case-by-case basis.

"We will continue to discuss our Iran policy with our counterparts around the world and the implications of our re-imposition of sanctions previously lifted or waivered under the JCPOA", he said.

One unresolved issue is whether the United States will press to disconnect Iranian banks from SWIFT, the worldwide system of interbank transfers headed in Belgium.

"It's a virtual certainty that Western banks are not going to violate the escrow restrictions", said Mark Dubowitz, the chief executive of the Washington-based Foundation for Defense of Democracies who has advised Pompeo.

Despite Mr. Trump fulfilling a campaign promise by re-imposing the sanctions, some Obama-era officials including former Secretary of State John Kerry have been caught working behind the scene to help the European Union continue their trade.

Pompeo and Mnuchin both said the sanctions will have exceptions for humanitarian purchases.

Federica Mogherini believes that despite the new rollout of sanctions, trade between Europe and Iran will continue in defiance of Mr. Trump.

"They know the President's words, which are that if you choose to do business with Iran, that is your choice, but if you do you won't do business with America as well".

"And the history, since May, now nearly six months on, is that most European companies are choosing - not surprisingly - to do business with America". Saudi Arabia could make up the difference; while the kingdom has threatened to use oil in retaliation for global punishment over its killing of journalist Jamal Khashoggi, it also is eager to squeeze Iran, its regional rival. Currently, Iran provides its tankers as well as insurance for oil cargoes to India.

Goldman Sachs said it expects Iran's crude oil exports to fall to 1.15 million barrels per day (bpd) by the end of the year, down from around 2.5 million bpd in mid-2018.

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