Iran oil minister: U.S. waivers not enough, painful time ahead

Frederick Owens
November 9, 2018

In China, about 9 million barrels of Iranian oil are docked outside Dalian port as the country sought to offload as much wares as possible before looming USA sanctions. Trump aims to force Washington's longtime adversary to accept tougher restrictions on its nuclear activity, drop its ballistic missile programme and scale back support for militant proxies in Middle East conflicts from Yemen to Syria.

India, Iran's second-biggest oil customer, also cut orders ahead of the sanctions, hoping its effort to reduce reliance on Tehran would pay off in Washington and win it a waiver once the sanctions restarted.

In addition, Afghanistan will be allowed to continue importing Iranian petroleum products, the spokesman said.

The API reported a draw in gasoline inventories for week ending November 2 in the amount of 1.2 million barrels.

Brian Hook, special US representative for Iran, said that as major insurers withdraw coverage for Iranian vessels, Iran will likely turn to domestic insurance companies that will be unable to cover losses for major maritime accidents.

IN THE END, President Donald Trump kicked the Iran crude oil sanctions can six months down the road, raising questions as to how the various players in the dispute will use the time. The other signatories to the nuclear deal - Germany, France, Britain, the European Union, Russia and China - have condemned Trump's walkout from the pact.

The top USA diplomat has granted an exception to certain U.S. sanctions that will allow the India-led development of a port in Iran as part of a new transportation corridor created to boost Afghanistan's economy, a State Department spokesman said on Tuesday.

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On October 3, WTI Crude prices hit $76.41, when the market was gripped by fear that much more Iranian oil than initially thought would come off the market due to the US sanctions on Tehran.

Officials from both banks said, however, that won-denominated payments for Iranian oil were still being reviewed, and that no schedule a for resumption was set yet. Strong crack margins should ensure a strong pick-up in refinery demand for crude oil - leading to lower stocks - once they return from maintenance.

Additionally, concern about oversupply on Thursday was substantial enough for traders to ignore new trade data from China showing that the country's oil imports rose to an all-time high at 9.61 million bpd in October. This is happening due to the rise in global oil prices and the depreciation in the value of the rupee. "The US has given waiver to some countries including India".

The sanctions, however, will inevitably erode Iran's state finances and raise already high inflation and jobless rates, making life harder for ordinary Iranians. We will bypass sanctions.

The sanctions are meant to exert pressure on Iran to renegotiate its 2015 nuclear deal with world powers, which Trump walked away from this year.

There was no need for India to cravenly accept the USA sanctions on Iran.

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