US agrees to grant India waiver from Iran oil sanctions

02 November, 2018, 16:56 | Author: Clarence Schmidt
  • Rouhani: Iran does not fear new US sanctions on energy, banking sectors

But sentiment turned negative after a report that several governments received waivers that would allow them to import some Iranian crude once USA sanctions are imposed next week.

The United States is preparing to reimpose sanctions on Iran's oil industry on November 5 after withdrawing from Tehran's nuclear deal with world powers.

India has held several rounds of conversations with the US, Iran and and other stakeholders on the issue.

In a presidential memorandum late on October 31, Trump said he determined there was sufficient supply of petroleum and petroleum products in the global market to cushion the impact of a cut in purchases of Iranian oil.

The US has broadly agreed to grant India a waiver from Iran sanctions after the Indian side chose to cut oil imports from Tehran by about a third in 2018-19, sources familiar with the matter said, adding that an official announcement could be made over the next few days.

The administration has said it is considering waivers on a case-by-case basis. Iran could mix its oil with crude from neighboring Iraq, sell on the black market or try a barter system supported by the Europeans. The companies will be allowed to import 1.25 million tons a month up to March 2019, the same as they ordered for October and November. "Administration officials used to tell us it's OK to give Iran concessions on SWIFT because they would force oil exports down to zero", the source said. State oil firms are yet to decide on how this quantum will be split between them.

How companies will pay for Iranian oil is still being negotiated between India and Iran, sources said, adding that it's likely that the two countries will stick to the existing mechanism under which 55% of payment is made in euro and 45% in rupee through UCO Bank.


Lack of clarity is still dominant regarding both Iranian exports and potential USA waivers, but Iran's top two oil buyers-China and India-are not bringing their imports down to zero.

USA hardliners want to press ahead on SWIFT, but others argue to keep the option as a bargaining card with the Europeans and say that SWIFT access remains useful in tracking Iranian transactions.

Rouhani pushed back against the upcoming sanctions, claiming America will reveal itself as guilty of unlawful actions in just a few days.

The chief economic advisor did not provide any details of the trade talks between India and the US.

Beyond Iran sanctions, oil output has been rising significantly in the past two months.

Despite Mr. Trump fulfilling a campaign promise by re-imposing the sanctions, some Obama-era officials including former Secretary of State John Kerry have been caught working behind the scene to help the European Union continue their trade. Indian public refineries like Mangalore has also been buying Iranian oil but not in the numbers that they were earlier.

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