US may issue Iran sanctions waivers

US Secretary of State Michael Pompeo said on Tuesday that Washington may grant waivers to the countries that seek relief from strict oil sanctions that the Trump administration intends to impose on Iran from Nov 4.

The two largest importers of oil from Iran, China and India, and another major importer, Turkey, have suggested that they may continue to buy oil from the Islamic Republic even after the sanctions are imposed.

“Well, that will violate the sanctions that we put in place. Come November 4th, there will be a US sanction that prevents crude oil from passing from Iran to other countries,” said Mr Pompeo in an interview to Sky News Arabia when asked how Washington would deal with the countries that continued to buy oil from Iran after Nov 4. “It will be sanctionable activity. We will enforce those sanctions.”

And then he explained that Washington may consider waiver requests from some countries who sought exemptions. “There will be a handful of countries that come to the United States and ask for relief from that. We’ll consider it,” he said.

Mr. Pompeo, who arrived in the Gulf region after a surprise visit to Afghanistan on Monday, used his stopover in Abu Dhabi to interact with government officials and the media to lay out the Trump administration’s hawkish stance on Iran.

“Make no mistake about it, we are determined to convince the Iranian leadership that this malign behavior won’t be rewarded and that the economic situation in their country will not be permitted to be rectified until such time as they become a more normal nation,” he said.

In a report on Tuesday, the prestigious Financial Times newspaper noted that despite such warnings, some countries may be forced to ignore the proposed US sanctions because of their reliance on the Iranian oil

“Global consumption relies on imports from Iran, which pumps 2.4 billion barrels a day, and that the world may not be able to accommodate the total cut-off the US is advocating,” the newspaper observed.

The newspaper also pointed out that US President Donald Trump recently asked Saudi Arabia to pump at least 2 million more barrels a day, but received a reply that stopped short of a commitment to do so.

Iran is the third-largest exporter of crude oil in the world, behind Saudi Arabia and Russia. The Iranian oil ministry’s news service Shana reported in May that the country’s oil exports reached a record 2.617 billion barrels per day (bpd) in April – the highest since Tehran signed a nuclear deal with global powers. But in May US President Donald Trump pulled out of the agreement and pledged to impose harsh economic sanctions on Iran for forcing it to abandon its nuclear programme.

Shana also reported that traditional importers of the Iranian oil – China, India, South Korea, and Japan – purchased more than 60 per cent of the Iranian output in April. China and India alone imported around 1.4 million bpd of Iranian oil each, Shana added.

But the National Iranian Oil Company (NIOC) reported this week that Iranian oil exports may decrease to 500,000 bpd when the sanctions kick in.

According to NIOC, the bulk of Iran’s shipments in June 2018 – about 62pc – were sent to customers in Asia while Europe accounted for 38pc of exports. The largest shipments went to China, the world’s top energy consumer, followed by India, South Korea and Japan.