Published: Fri, November 02, 2018
Global Media | By Derrick Guzman

Sweeping Iran sanctions target oil, banks

Sweeping Iran sanctions target oil, banks

The US will reintroduce the new sanctions targeting Iranian oil on Monday and American officials have said Washington does not want to harm friends and allies dependent on the oil.

The U.S. had called for all countries to "zero out" their oil purchases from Iran, which India has not done.

The US has insisted all along that it wanted every country to reduce oil imports from Iran to zero eventually, but was open to country-specific waivers that would allow limited imports by those pledging "significant" cut.

The other four countries to get waivers remained to be identified, but Turkey was predicted to be one of them.

India has held several rounds of conversations with the US, Iran and and other stakeholders on the issue. Iran supplied 18.4 million tonnes of crude oil between April 2017 and January 2018 (first 10 months of fiscal 2017-18).

Russian Energy Ministry data showed on Friday the country pumped 11.41 million barrels per day (bpd) of crude oil in October, a 30-year high. The companies will be allowed to import 1.25 million tons a month up to March 2019, the same as they ordered for October and November. State oil firms are yet to decide on how this quantum will be split between them.

"The waivers granted to these eight countries show that the market needs Iran's oil and it can not be pulled out of the market".

How companies will pay for Iranian oil is still being negotiated between India and Iran, sources said, adding that it's likely that the two countries will stick to the existing mechanism under which 55% of payment is made in euro and 45% in rupee through UCO Bank.

United States hardliners want to press ahead on SWIFT, but others argue to keep the option as a bargaining card with the Europeans and say that SWIFT access remains useful in tracking Iranian transactions.

The source said US Secretary of State Michael Pompeo was expected to announce the number of exemptions later on Friday.

The chief economic advisor did not provide any details of the trade talks between India and the US.

Iran is India's third-largest oil supplier after Iraq and Saudi Arabia.

The United States plans to impose sanctions targeting Iran's oil sector on November 4.

Hours before he spoke, Iranian President Hassan Rohani warned Iranians they could face more economic hardship in the months ahead as the US imposes a new round of sanctions.

The concessions have reportedly sparked outrage among U.S. officials who take a hardline attitude towards Iran, even causing White House National Security Advisor John Bolton to decline to participate in the sanctions rollout on November, 4. The leader said it's possible Iran will face more hard times ahead, but asserted that the government will use all its power to reduce any problems.

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