US to end waivers on Iran oil imports

WASHINGTON: The United States announced on Monday it will no longer grant sanctions’ exemptions to Iran’s oil customers, potentially punishing allies such as India as it tries to squeeze Tehran’s top export.

The White House said that Saudi Arabia and the United Arab Emirates -- close US allies that back President Donald Trump’s hawkish stance against regional rival Iran -- would work to make up the difference in oil to ensure that global markets are not rocked.

"This decision is intended to bring Iran´s oil exports to zero, denying the regime itsprincipal source of revenue," the White House said in a statement. "The Trump administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime´s destabilizing activity threatening the United States, our partners and allies and security in the Middle East," it said.

Eight governments were initially given six-month reprieves from the unilateral US sanctions on Iran. They include India, which has warm ties with Washington but disagrees on the US insistence that Iran is a threat. Other countries that will be affected include China and Turkey, opening up new friction in contentious relationships if the United States goes ahead with sanctions over buying Iranian oil.

However, Iran made it clear that it is ready to cope with the situation after US waiver. The others -- Greece, Italy, Japan, South Korea and Taiwan -- have already heavily reduced their purchases from Iran.

Trump last year withdrew the United States from an accord negotiated by his predecessor, Barack Obama, under which Iran drastically scaled back its nuclear programme in return for promises of sanctions relief. The Trump administration, backed by Saudi Arabia and Israel, has instead unilaterally imposed sanctions and demanded that other countries follow suit.

US officials say that they are aiming at choking off Iranian revenue so as to reduce the clerical regime´s regional clout, notably its support for militants groups such as Lebanon´s Hezbollah. Meanwhile, China consistently opposes unilateral US sanctions against Iran, the Chinese foreign ministry said on Monday amid reports that Washington is expected to announce that buyers of Iranian oil must halt imports soon or face sanctions.

Ministry spokesman Geng Shuang, speaking at a daily news briefing, said China’s bilateral cooperation with Iran was in accordance with the law. China is a major importer of Iranian oil and was one of eight buyers who were granted a waiver by the United States to continue buying Iranian oil.

The Trump administration is expected to announce on Monday that they will be cancelling the waivers to countries that are still buying oil from Iran. Officials in Asia opposed the expected move, pointing to tight market conditions and high fuel prices that were harming industry.

Benchmark Brent crude oil futures rose by as much as 3.2 percent to $74.31 a barrel, the highest since Nov. 1, in early trading on Monday in reaction to expectations of tightening supply. US West Texas Intermediate (WTI) futures climbed as much as 3 percent to $65.87 a barrel, its highest since Oct. 30.

US President Donald Trump wants to end the waivers to exert "maximum economic pressure" on Iran by cutting off its oil exports and reducing its main revenue source to zero. In November, the US re-imposed sanctions on exports of Iranian oil after President Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Washington, however, granted waivers to Iran's eight main buyers - China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece - that allowed them limited purchases for six months.

On Monday, Secretary of State Mike Pompeo will announce "that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate," the Washington Post's columnist Josh Rogin said in his report, citing two State Department officials that he did not name.