U.S. Open To Limited Exemptions From Sanctions On Iranian Oil Exports

Countries that continue to import Iranian oil could avoid penalties by making "significant reductions" by the time Washington reimposes sanctions on Tehran later this year, top U.S. officials have said.

"We want people to reduce oil purchases to zero, but in certain cases if people can't do that overnight, we'll consider exemptions," U.S. Treasury Secretary Steven Mnuchin said in remarks embargoed for release until July 16.

A number of Iranian oil customers, notably major buyers in Asia such as Japan and India, have said they cannot cut all imports from Tehran by a November deadline without hurting their own economies.

Mnuchin and U.S. Secretary of State Mike Pompeo, in embargoed remarks to journalists made last week, maintained that despite providing some leniency to nations which depend on Iranian oil, the administration of U.S. President Donald Trump remains intent on imposing the tighest possible sanctions on Iran.

Mnuchin said Washington had made clear to allies that it expects them to enforce the sanctions against Iran, "but if there are specific situations, we're open to listening."

"We've said very specifically, there's no blanket waivers, there's no grandfathering," he said. But "we want to be very careful in the wind down around the energy markets to make sure that people have the time."

"The State Department has the ability to issue waivers... That's something that Treasury and State will be doing," he said.

"Make no mistake about it," Pompeo said, "we're determined to impose these sanctions globally and broadly."

Trump has repeatedly called Iran the most destabilizing force in the Middle East, pointing to conflicts involving Shi'ite militia groups Tehran supports in Syria, Iraq, and Yemen.

Pompeo said the sanctions are aimed at depriving Iran of the funding it needs to "continue to foment terror and malign activity around the world."

He said "the mission is to get Iran to become a normal country," where it stops "assassinating people" and "launching missiles around the world."

"So, yes, we're using every element of American power to try and achieve [that] end," he said.

Iranian Foreign Minister Mohammad Javad Zarif tweeted on July 16 that Iran has filed a complaint with the International Court of Justice in the Hague against the renewed U.S. sanctions.

Zarif said the sanctions violate international law and accused Washington of showing "contempt for diplomacy and legal obligations."

While the United States is reimposing sanctions on Iran following Trump's decision in May to withdraw from Iran's nuclear deal with world powers, Germany, France, and Britain didn't withdraw from the 2015 accord and have told Tehran that they will seek to counteract U.S. sanctions and maintain the golba sanctions relief that the deal granted in exchange for curbs on Iran's nuclear activities.

Several European countries sought specific waivers from the U.S. sanctions, but French Finance Minister Bruno Le Maire told French media over the weekend that Washington had rejected France's request for waivers for its companies operating in Iran.

Without specific exemptions, many corporations from France and other countries have said they will pull out of Iran, citing the threat of U.S. financial penalties.

The Trump administration claims that more than 50 foreign companies have withdrawn from Iran since the sanctions were announced.

Still, Mnuchin acknowledged that replacing Iranian crude exports will not be easy for many of its customers or for the global oil markets, where the threat of looming sanctions has put pressure on oil prices.

The softer stance Washington announced on Iranian oil exports on July 16 helped send premium crude prices down by 4.4 percent to about $72 a barrel in London trading.