Almost six months after Washington announced its withdrawal from the JCPOA deal, the U.S. formally re-instated sanctions on Iran as of today.
In a press conference, U.S. Secretary of State Mike Pompeo announced that the following countries have received (temporary) waivers, allowing them to continue to import Iranian crude oil.
Several other European nations that asked to be exempted did not get a waiver.
U.S. Secretary of State Mike Pompeo has also implicitly warned India and China that there would be consequences if the two countries continue to buy Iranian oil after the U.S. sanctions against Tehran went into effect today.
“Watch the Iranians. That is who really understands the actions we are taking,” Pompeo told Fox News in an interview on Sunday. In response to a question about whether Washington can make sure China and India will eventually stop importing Iranian oil, Pompeo said, “Chris [Wallace], watch what we do. Watch as we've already taken more crude oil off the market than any time in previous history. Watch the efforts that President Trump's policies have achieved. We've done all of this, too, Chris, while making sure that American consumers don't suffer.”
Although this is far from anything specific, the comments come a couple of days after Russia’s Energy Minister Alexander Novak told the Financial Times that Russia will continue to buy Iranian crude and help Tehran sell it abroad. Because of this timing, some saw in Pompeo’s words a thinly veiled warning to Russia as well. Related: Why Trump Decided To Back Down On Iran
“We believe we should look for mechanisms that would allow us to continue developing co-operation with our partners, with Iran,” Novak told the FT. Russia buys Iranian crude under an oil-for-goods swap deal inked in 2014 and then resells it to other countries. When asked by the FT if there were plans to expand the volume of oil traded, Novak said Moscow will first assess the effects of the sanctions before making a decision on this.
Pompeo’s comments are certainly in tune with the general sentiment in Washington, but they might not reflect the reality of the decline in Iranian exports. The latest data suggests the drop in exports between May and September has not been that great. Of course, since September things might have changed.
One thing has changed for certain: in late October, all Iranian tankers turned off their geolocation devices, the AFP reported, citing TankerTrackers.com, meaning a lot of oil could be headed abroad, but this won’t become immediately evident. If this becomes evident, it would certainly undermine the upbeat mood and probably lead to an even more hawkish stance by Washington.
By Irina Slav For Oilprice.com
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