• 4 minutes Why Trump will win the wall fight
  • 7 minutes Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 5 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 3 hours Itt looks like natural gas may be at its lowest price ever.
  • 5 hours America’s Shale Boom Keeps Rolling Even as Wildcatters Save Cash
  • 17 hours North Korea's Kim To Travel To Vietnam By Train, Summit At Government Guesthouse
  • 19 hours Oil imports by countries
  • 19 hours AI Will Eliminate Call Center Jobs
  • 23 hours NZ Oil, Gas Ban Could Cost $30 Bln
  • 8 hours US-backed coup in Venezuela not so smooth
  • 2 hours Amazon’s Exit Could Scare Off Tech Companies From New York
  • 1 day Ayn Rand Was Right
  • 1 day Solar and Wind Will Not "Save" the Climate
  • 1 day Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 6 hours Some Good News on Climate Change Maybe
Forget EVs, Detroit's Big 3 Battle For Heavy-Duty Truck Segment

Forget EVs, Detroit's Big 3 Battle For Heavy-Duty Truck Segment

While electric vehicles are stealing…

Does Saudi Arabia Really Have As Much Oil As Analysts Think?

Does Saudi Arabia Really Have As Much Oil As Analysts Think?

Saudi Arabia’s official crude oil…

Washington Likely Keep Iran Sanction Waivers In Place

supertanker

The United States is unlikely to entirely remove waivers for Iran sanctions it granted to eight large importers of the commodity in November, according to analysts, as quoted by Reuters.

The countries most likely to receive waiver extensions are also the countries most in need of the oil supply they receive from Tehran: China, India, Japan, South Korea, and Turkey. Italy, Taiwan, and Greece, which were granted waivers in November, are smaller importers of Iranian crude.

Earlier this week, Washington’s special representative for Iran, Brian Hook, said there were no plans to extend any waivers or grant more of them, the ultimate goal of the Trump administration remaining to bring Iranian crude oil exports down to zero. However, if analysts are to be believed, this is unrealistic.

“Other geopolitical priorities will moderate the administration’s desire to halt Iranian exports, particularly with Iran’s top two purchasers, China and India,” Eurasia Group analysts said, adding “The reductions will probably hit the Iranian economy hard especially because President Hassan Rouhani’s administration is planning its budget around unrealistically high expectations for oil revenue.”

Related: What’s Behind Oil’s Slow Flash Crash?

Tanker-tracking company Kpler noted this week in an update on Iranian oil flows that the country has suffered a decline in export-bound oil shipments after the announcement by President Trump he was pulling the U.S. out of the Iran nuclear deal, with that decline becoming particularly sharp ahead of the November sanctions.

Iran is still exporting at rates of over 1 million bpd, despite the fact Japan and South Korea suspended all intake of Iranian crude—at least officially—before November. As of December, Kpler said, as much as 51 percent of Iranian oil cargos traveled off the radar, often leaving their final destination a secret by discharging their cargo to another ship.

What’s more, buyers are looking for and finding ways to circumvent the sanctions: India set up a mechanism using local banks and the local currency to pay for Iranian crude excluding dollars for the equation. China has used ways to avoid sanctions in its trade relations with Iran before and it has made clear it will use them again. It makes sense, then that Brian Hook said Washington will be looking to balance U.S. national security and economic interests when deciding how to proceed with the waivers.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Mamdouh Salameh on January 18 2019 said:
    The United States has no alternative but to renew the sanction waivers it granted to eight countries in November last year when they expire in May this year or issue new ones.

    There are two important reasons for that. The first is for the Trump administration to use them as a fig leaf to mask the fact that their zero exports option is out of reach and that the sanctions have so far failed to cost Iran the loss of even one single barrel of oil. On the contrary, Iran’s oil exports and its oil revenue have both improved despite the sanctions as confirmed by Iranian President Rouhani and the Iranian Central Bank respectively.

    The second reason is that the countries who received the waivers (China, India, Japan, South Korea, Turkey, Taiwan, Italy, and Greece) with the exception of Japan and South Korea would have continued to buy Iranian crude with or without waivers.

    Moreover, 95% of Iran’s oil exports estimated at 2.125 mbd go to China (35%), India (33%), the EU (20%) and Turkey (7%). The remaining 5% go to Japan and South Korea.

    If the waivers weren’t renewed or new ones weren’t issued, it will mean that only 5% of Iranian crude imports by Japan and South Korea may not materialize. However, China, India and Turkey who account for 95% of Iranian crude exports have been significantly increasing their purchases of Iranian crude thus offsetting that possibility.

    The bitter truth is that it is dawning on the Tump administration that the sanction are doomed to fail.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News