Ahead of the new US sanctions, more Iran’s customers get sanction waivers

Tabnak – Just days before the implementation of a new round of US sanctions against Iran, Washington is facing with the reality that it cannot reach its goal of cutting the Islamic Republic’s oil exports down to zero. As a result, the White House has started to grant sanction waivers to the main purchasers of Iran’s oil.

In this vein, officials in New Delhi say the United States has agreed to grant India a waiver from Iran sanctions so that the country would be able to maintain imports of crude oil from the Islamic Republic. The waiver would allow Indian companies to continue importing about 1.25 million tons of oil per month from Iran until March 2019.

“India and the US have broadly agreed on a waiver. India will cut import by a third, which is a significant cut,” a source said, as quoted by the New Delhi-based Economic Times newspaper.

India had imported about 22 million tons of crude oil from Iran in 2017-18 and planned to raise that to about 30 million tons in 2018-19. But, as a condition of waiver, Indian oil firms will reduce their imports significantly, the source added.

Indian companies can import 1.25 million tons a month up to March 2019, the same as they ordered for October and November, the Economic Times wrote adding that an official statement on that front would be made within the next few days.

State oil firms are yet to decide on how this quantum will be split between them. A waiver will come as a big relief to Indian Oil and MRPL, the two largest Iranian oil consumers.

The Economic Times added that it was still not clear how Indian companies would pay for imports of Iranian oil and that a mechanism for the same purpose was still under negotiation between Iran and India.

It added that the two countries were likely to stick to the existing mechanism under which 55 percent of payment would be made in euro and 45 percent in rupee through India’s UCO Bank.

It was also reported on Thursday that South Korea has reached a same agreement with the US to continue its energy ties with Iran. A US exemption for South Korea would mean a resumption in imports of the Persian Gulf state’s South Pars condensate, a type of ultra-light oil that is particularly critical for the Asian nation because many of its plants are geared to process it.

The developments come as the administration of US President Donald Trump is preparing to launch the second wave of sanctions against Iran from November 4 in which a universal ban on the country’s oil exports appears to be a primary objective.

US officials have already said the sanctions would be meant to bring down Iran’s oil exports to zero. However, Iranian officials have repeatedly rejected the feasibility of this, stressing that international consumers cannot afford to lose Iranian supplies.