WASHINGTON (Reuters) – The United States reinstated Monday sanctions to stifle the Iranian oil and sea industries, while temporarily allowing large customers such as China and India to continue buying crude from the Islamic Republic.
FILE PHOTO: General view of an oil dock from a ship at the port of Kalantari in the city of Chabahar, 300 km east of the Strait of Hormuz on January 17, 2012. REUTERS / Raheb Homavandi / Photo File
After giving up on the Iran nuclear deal signed in 2015, US President Donald Trump is trying to paralyze the oil-dependent Iranian economy and force Tehran to quell not only its nuclear ambitions and its ballistic missile program but also its support for proxies in Syria, Yemen, Lebanon and elsewhere. from the Middle-East.
Earlier, Iranian President Hassan Rouhani said Iran would continue to sell its oil despite Washington's "economic war". Foreign Minister Mohammad Javad Zarif said the "harassment" of the US has perverse effects in further isolating Washington.
Washington is committed to permanently stop all Iranian crude oil purchases in the world, but for the moment eight countries – China, India, South Korea, Japan, Italy , Greece, Taiwan and Turkey – can continue to import without penalty. Crude oil exports account for one-third of the revenue of the Iranian government.
"More than 20 importing countries have already reduced their imports of crude oil, removing more than a million barrels of crude a day," US Secretary of State Mike Pompeo told reporters. "Since May, the regime has lost more than $ 2.5 billion in oil revenue."
Pompeo said the exemptions were issued to countries that had already reduced their purchases of Iranian crude over the past six months and to "ensure a well-supplied oil market". The exceptions are designed to last 180 days.
Trump said he wanted to slowly go over the sanctions, citing concerns about the cause of soaring world prices.
"I could bring Iranian oil back to zero immediately, but that would be a shock to the market. I do not want to drive up oil prices, "he told reporters before heading to a campaign event.
Iran's exports peaked at 2.8 million barrels per day (bpd) in April, including 300,000 bpd of condensate, a lighter form of oil. Since then, global exports have fallen to 1.8 million bpd, according to the Wood Mackenzie Energy Council, which expects a drop in volumes to 1 million bpd.
GRAPHIC: The Iranian Nuclear Agreement – tmsnrt.rs/2rvkaq6
"SQUEEZE IRAN HARD"
Oil prices in October exceeded $ 85 per barrel for fear of a sharp drop in Iranian exports. Since then, prices have fallen as some buyers were expected to benefit from exemptions and increased supply from other major producers.
Ellen Wald, an oil analyst and member of the Atlantic Council, said the impact on world oil prices should be "blunted" for the 180-day period of waivers granted to the eight countries. The Trump administration hopes that Iraq and a so-called neutral zone between Saudi Arabia and Kuwait will produce more oil next year, if a dispute between the two countries over the area is resolved.
In addition, US oil production reached a record 11.3 million barrels this year and high and sustained production could reduce the impact of sanctions. On Monday, the benchmark Brent crude oil futures contract, LCOc1, wiped out its previous gains of $ 72.85 a barrel, while the US CLc1 crude futures contract fell 0.4% to 62.87. dollars. [O/R]
Oil markets have been anticipating sanctions for months, and major world producers are increasing production.
The joint production of the world's major producers – Russia, the United States and Saudi Arabia – exceeded for the first time the 33 million barrels a day mark, an increase of 10 million barrels per day since 2010.
US officials said countries with temporary waivers would deposit their income into third-party accounts for Tehran, which would only use them for humanitarian purposes.
The sanctions also concern 50 Iranian banks and subsidiaries, more than 200 people and vessels in the shipping sector, the Iranian national carrier Tehran, Iran Air, and more than 65 of its aircraft, said a statement from the US Treasury.
"We've been saying for a long time: Zero must mean zero," said John Bolton, National Security Advisor at the White House, during an interview with Fox Business Network. "These are not permanent derogations – no way, we will do everything in our power to tighten Iran hard."
Devika Krishna Kumar in NEW YORK, Jane Chung in SEOUL, Kaori Kaneko and Osamu Tsukimori in TOKYO, Ben Blanchard in BEIJING, Nidhi Verma in NEW DELHI and Lesley Wroughton, Timothy Gardner and Roberta Rampton in WASHINGTON; Written by Henning Gloystein and Dmitry Zhdannikov; Edited by David Gaffen, Bill Trott and James Dalgleish