News ID: 233700
Published: 1152 GMT November 02, 2018

US allows eight nations to keep buying Iran oil

US allows eight nations to keep buying Iran oil
REUTERS

International Desk

Iran dismisses fresh US curbs, says it can manage economy

Russia vows to help Iran counter US oil sanctions

The United States said on Friday it will temporarily allow eight “jurisdictions” to keep importing Iranian oil when US sanctions come back into force on Monday, sparing them for now from the threat of US economic penalties.

US Secretary of State Mike Pompeo said eight nations, which other officials identified as US allies such as Italy, India, Japan and South Korea, will receive temporary waivers allowing them to continue to import Iranian petroleum products for a limited period as long as they end such imports entirely. 

He did not name the jurisdictions, but said the European Union as a whole, which has 28 members, would not receive one.

Turkey's Energy Minister Fatih Donmez said his country had been told it would get a waiver.

Pompeo said the sanctions are "aimed at fundamentally altering the behavior of the Islamic Republic of Iran." He has released a list of 12 demands that Iran must meet if it wants the sanctions lifted. They include ending military engagement in Syria and completely halting its ballistic missile and nuclear development.

"Maximum pressure means maximum pressure," he said.

Treasury Secretary Stephen Mnuchin said 700 more Iranian companies and people would be added to the sanctions lists under the reimposed sanctions.

Mnuchin also said Washington had made clear to the SWIFT financial messaging service that it was expected to disconnect all Iranian financial institutions that the United States plans to blacklist as of Monday. He declined to name the targeted institutions.

Mnuchin, however, defended the move to allow some Iranian banks to remain connected to SWIFT, saying that the Belgium-based firm had been warned that it will face penalties if sanctioned institutions are permitted to use it.

Pompeo and Mnuchin both said the sanctions will have exceptions for humanitarian purchases.

The restoration of sanctions is part of a wider plan by US President Donald Trump to force Iran to curb its nuclear and missile programs as well as its regional activities.  

Trump set in motion the resumption of US sanctions on May 8, when he announced his withdrawal from the 2015 Iran nuclear agreement under which Tehran had agreed to curtail its nuclear program in return for relief from US economic penalties.

 

Iran: Sanctions will fail

Iran said it was not troubled over the reimposition of US sanctions, which target not only its oil and gas sector but also shipping, ship-building and banking industries.

"America will not be able to carry out any measure against our great and brave nation ... We have the knowledge and the capability to manage the country's economic affairs," Foreign Ministry spokesman Bahram Qassemi told national TV.

"The possibility of America being able to achieve its economic goals through these sanctions is very remote and there is certainly no possibility that it will attain its political goals through such sanctions," Qassemi said.

"The new US sanctions will mostly have psychological effects."

 

Russia to help Iran

Russia vowed to help Iran counter US attempts to throttle its oil sales when sanctions come into effect next week, saying it will continue trading Tehran’s crude.

Russia is looking to “continue developing” its trading of Iranian oil, which it sells to third countries under a 2014 oil-for-goods deal, regardless of the sanctions, Energy Minister Alexander Novak told the Financial Times.

“We believe we should look for mechanisms that would allow us to continue developing cooperation with our partners, with Iran,” Novak said.

The ministry said it could “definitely confirm” the trade would continue next week.

The 2014 Russia-Iran deal allows for an increase in currently-traded volumes and Iran will be looking for additional buyers if some of its regular customers turn away when the sanctions take effect.

Novak declined to comment on whether an increase in trading was likely, but said Russia would analyze the impact of the sanctions before making any decision on altering its volumes.

During a visit by Trump’s hawkish national security adviser John Bolton to Moscow last week, US officials warned their Russian counterparts against attempting to assist Tehran in ways that would allow Iran to sell oil in international markets.

Iran’s crude shipments peaked at more than 2.5m barrels per day before the sanctions were announced, but exports fell to 1.7m bpd in October, according to data from tanker tracking firm Kpler.

The 2014 deal between Russia and Iran uses a formerly dormant Soviet state enterprise, Promsyryoimport. The amount traded has been around 100,000 barrels a day of Iranian crude, according to both countries’ ministers.

In exchange, Tehran uses the revenue to pay for Russian goods and services such as power generation, railway infrastructure or agricultural products.

“It gives Iran a guaranteed resource to pay, and that allows increasing trade,” Novak said in an interview in Moscow. “We have historical trade with Iran. Iran needs our technology and services.”

Iran’s Oil Minister Bijan Namdar Zanganeh told Iranian media earlier this year transactions with Russia are done in euros. A Russian ministry official told the FT that the transactions would not involve US dollars.

Zanganeh said on Wednesday that he would “speak no word” about the country’s future oil sales and denied reports Russia was ready to increase its assistance.

Reuters and AP also contributed to this story.

 

   
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Resource: bloomberg.com
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