USA to grant 8 countries Iran sanctions waivers for oil

Gladys Abbott
November 2, 2018

However, U.S. officials are compiling a list of those countries that have significantly reduced their oil imports from Tehran, who would qualify for waivers, and India expects to be on that list.

Oil is also under pressure from rising output by the world's biggest producers, Russia, the United States and Saudi Arabia, which are helping to replenish global oil inventories after more than a year of stock draws.

In the first three weeks of October, Iran's crude and condensate exports averaged around 1.90-1.95 million bpd according to Platts ship tracking data, but exports could be even higher due to the Iranian tactic to switch off tracking devices to hide some volumes and destinations of its oil exports, sources say.

The sanctions bring back the punitive measures that were imposed and then lifted by former president Barack Obama who reached an worldwide agreement under which Iran moved to end its nuclear program. Iran could mix its oil with crude from neighboring Iraq, sell on the black market or try a barter system supported by the European Union.

In addition to Japan, India, and South Korea, the USA would grant the oil waiver to China as well, two people familiar with Washington-Beijing discussions said on the condition of anonymity. But, as a condition of waiver, Indian oil firms will reduce their imports to 14-15 million tonnes, the source said. "I don't know whether these waivers are permanent or temporary ones", IRIB quoted Iran's Deputy Oil Minister Ali Kardor as saying.

Brent, against which Nigeria's oil is priced, had early this month hit a new four-year high of $86.74 per barrel, fuelled by concerns about a shortfall in global supply as USA sanctions whittle away at Iranian crude exports.

Brent and US crude posted their biggest monthly percentage decline since July 2016 in October, with Brent down 8.8 percent for the month and USA crude losing almost 11 percent.

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Russian Federation is pumping oil at a post-Soviet high, USA crude output has topped 11 million barrels a day and a Reuters survey of OPEC production shows the group more than made up for any declines in Iranian shipments in October.

"We think Trump will agree to China importing some volumes, similar to the treatment that India and South Korea receive", Clayton Allen of Height Securities said in a note on Friday. But Washington also has been considering waivers from the sanctions requested by allies such as India and Turkey.

Through April, South Korea had imported an average of 300,000 bpd of Iranian oil, but in the months since Trump's decision, it tapered those purchases in anticipation of the sanctions.

Turkey's Energy Ministry said on Friday it had heard rumors of waivers but added it had not received written notification of any exemption on buying Iran oil after the United States reimposes sanctions on Tehran on 5 November.

"The US may use waivers to slow-walk implementation, but these will not apply indefinitely", Allen said.

Among other countries closely connected to Iran's energy system is Iraq, which imports gas via a pipeline.

Iran said it does not fear the impending US sanctions that are set to go into effect next week.

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