A lawmaker said Iran’s past experiences of selling oil under stiff sanctions has provided the country with workable solutions to sidestep US sanctions aimed to cut its oil exports to zero.
Speaking to Iran Daily, Hassan Bahramnia said the US cannot drive Iran’s oil exports to zero, adding that “Iran has gained experiences from past sanctions (before 2015) that opens up solutions to get around them.”
“We know what to do under such conditions and how to keep our oil revenues.”
The US administration has said it aims to reduce Iran’s oil exports to zero and has encouraged Saudi Arabia, other OPEC states and Russia to pump more oil to meet any shortfall.
This comes as the US President Donald Trump, despite dismays from allies, unilaterally pulled out of the Joint Comprehensive Plan of Action (JCPOA) that put limits on Iran nuclear program in return for lifting of sanctions.
US sanctions on Iran’s oil exports are scheduled to kick in on November 4.
Exports to India, China to continue
Bahramnia, who is a member of Parliament Energy Committee, said Iran’s oil exports to “India and China and some other countries” will continue.
But he added that the country “may have to sell its oil with a more modest price.”
A senior Indian official said on Friday that Indian public sector companies have already placed orders with Iran for crude oil supply during November.
"Our public sector companies have already placed orders for the month of November with Iran," said Sunjay Sudhir, joint secretary for international cooperation at the Ministry of Petroleum and Natural Gas, according to Business Standard.
Sanctions mean oil prices surge
Bahramnia said the recent surge in oil prices shows that the market knows it cannot replace Iran oil quota and the US statements saying that prices would not go up were just a “political bluff”.
“What matters for the world economy is the price of oil. Countries are seeking their interests here. But the recent hike in prices has had many countries worried.
“Not only has the US has not been able to stop Iran’s oil exports, but we have also seen the increase of oil prices, something that will continue,” he added.
Last month CNBC quoted Tamas Varga, a senior analyst at PVM Oil Associates, as saying that the push to replace Iran’s oil exports could see “Brent reaching $100 a barrel this year."
In a sign of backtracking, US Treasury Secretary Steven Mnuchin said last week that countries would have to reduce their purchases of Iranian oil by more than the roughly 20 percent level they did from 2013 to 2015 to get waivers.
Pointing to the “different stance” of the European Union member states towards US sanctions on Iran, the lawmaker said “the EU is not completely obeying what Trump says and has said ‘no’ to many US stances.”
Last week, Reuters reported that a new European Union mechanism to facilitate payments for Iranian exports should be legally in place by November 4.
The mechanism, a so-called Special Purpose Vehicle (SPV), is designed to sidestep the US financial system by using an EU intermediary to handle trade with Iran. It could ensure, for example, that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value.