US sanctions against Iranian fuel export was softened by waivers that will allow eight countries including India, Japan, and South Korea to continue to import Iranian crude.
As reported in Times of India, waivers were granted amid goals of the Trump administration to stop providing revenue to Iran’s economy, in exchange for continued cuts so as to tackle the oil prices which have been coming under pressure.
China, although being among the eight countries as well as a major importer of Iran’s crude, is still in discussion with the United States on terms, the news reported, citing two individuals familiar with the discussion who chose to remain unidentified. The other four remaining countries that will get waivers are still yet to be announced.
According to the news report, the Trump administration must maintain a sophisticated balancing act that ensure sufficient supply in the oil market while avoiding politically influenced surge in fuel prices. In addition, it needs to ensure that the Iran government doesn’t accumulate enough revenue that the US sanctions become insignificant.
With rising speculation that some of the countries will get waivers along with potential signs that members of OPEC (Organization of the Petroleum Exporting Countries) will pump more to minimize any supply gap, the global benchmark Brent crude had fallen nearly 15% from more than $85 per barrel. On Friday, Oil prices estimates were at $73.04 in London.
In previous news, Secretary of State Michael Pompeo said that the sanctions are expected to be imposed if the purchases of Iranian oil didn’t go to zero from every nation. But, it acknowledged that the waivers were being negotiated with countries whose energy industry entirely depend on the crude from Middle East.
In the latest news, the US administration official announced that the waivers are only temporary and the US will expect countries to gradually cut off imports from Iran in the coming months. However, it declined to provide details on the volume of oil the eight countries will be allowed to purchase under exemptions.
The complete list of countries receiving waivers is likely to be released on Monday, when the administration impose its restrictions against dealings of oil with Iran. Further, it has asked those countries to cut economic ties with the Persian Gulf state including trade activities that are not covered by the sanctions.