US decides not to extend the waivers for Iran’s oil exports, facing global market with a gloomy perspective

Tabnak – As the latest representation of its policy of “maximizing pressures” against Iran, the US announced it won’t extend the sanctions waivers for the purchasers of Iranian oil. The move comes while many experts have been warning that cutting Iran’s oil export would have a huge negative impact on the global oil market.

According to The Financial Times, the Trump administration said it would eliminate waivers that have allowed Japan, India and China to import Iranian oil despite US sanctions.

In announcing the move, Mike Pompeo, the US secretary of state, said Washington’s aim was to bring Iran’s crude exports to zero. South Korea and Turkey would also be hit by the end of waivers.

“Any nation interacting with Iran should err in the side of caution and do due diligence,” Pompeo said on Monday. “How long we remain on zero depends solely on Iran’s behavior.”

At the same time, the White House announced it had reached an agreement with Saudi Arabia and the United Arab Emirates to ensure there was “sufficient supply in the markets” to compensate for the loss of Iranian exports.

Pompeo did not give details of the Saudi-UAE deal, and a White House statement only said the three countries “have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market”.

The decision to not extend the waivers, which was first reported by The Washington Post, was finalized on Friday by Trump, according to officials speaking to the Associated Press on the condition of anonymity. They said it is intended to further ramp up pressure on Iran by strangling the revenue it gets from oil exports.

The administration granted eight oil sanctions waivers when it re-imposed sanctions on Iran after Trump pulled the US out of the landmark 2015 nuclear deal. They were granted in part to give those countries more time to find alternate energy sources but also to prevent a shock to global oil markets from the sudden removal of Iranian crude.

Since November, three of the eight - Italy, Greece and Taiwan - have stopped importing oil from Iran. The other five, however, have not, and have lobbied for their waivers to be extended.

According to some analysts, the end of the waivers was expected to hit Asian buyers, including China and India, the hardest, Aljazeera reports. Kim Jae-kyung of the Korean Energy Economics Institute said ending the waivers "will be a problem if South Korea can't bring in cheap Iranian condensate (for) South Korean petrochemical makers".

Meanwhile, China has already slammed US plans to tell it and other countries to stop buying Iranian oil or face sanctions, saying Beijing's cooperation with Tehran is in accordance with law.

"China has always opposed the US imposition of so-called 'unilateral sanctions' and 'long-arm jurisdiction'," Foreign Ministry spokesman Geng Shuang told a daily news briefing in Beijing on Monday.

Global benchmark Brent crude oil futures rose by as much as 3.2 percent to $74.30 a barrel, the highest since November 1, in early Asian trading on Monday in reaction to expectations of tightening supply.