US President Donald Trump said he gave temporary exemptions to India and seven other major importers of Iranian oil as they sought US “help” and he did not want to drive oil prices “up to USD 100 a barrel or USD 150 a barrel”.
The US on Monday imposed “the toughest ever” sanctions on a defiant Iran aimed at altering the Iranian regimes “behaviour”. The sanctions cover Irans banking and energy sectors and reinstate penalties for countries and companies in Europe, Asia and elsewhere that do not halt Iranian oil imports.
The US has also granted waivers to almost all key clients of Iran’s crude oil for fear of further hikes in oil prices. The countries exempted from the US sanctions on Iran’s oil exports include China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, which together took in over 80 percent of Iran's oil exports last year.
However, Secretary of State Mike Pompeo said that eight countries — India, China, Italy, Greece, Japan, South Korea, Taiwan and Turkey — were temporarily allowed to continue buying Iranian oil as they showed “significant reduction” in oil purchase from the Persian Gulf country.
“It will be a difficult period but Iran’s economy will withstand it for various reasons,” a second diplomat told Reuters, “including (the fact of) Russia being under (US and EU) sanctions, Saudi Arabia having its own financial and political issues, and (trade war) between China and the United States.”
“I gave some countries a break on the oil. I did it a little bit because they really asked for some help,” Trump told reporters at a press conference in the White House on Wednesday.
The President said he also did it “because I dont want to drive oil prices up to USD 100 a barrel or USD 150 a barrel”.
“I am driving them (oil prices) down. If you look at oil prices, they have come down very substantially over the last couple of months,” he asserted.
Trump said the sanctions may “get tougher as time goes by”, but he does not want them to have any effect on the global oil prices worldwide as he “consider that to be a tax, and I dont like taxes”.
India welcomes US waivers on Iran oil purchase
Later at another press conference, the State Department said its goal is to go down to zero oil import from Iran and during the next six months, it will monitor the diplomatic progress and the price of oil to ensure that the imposition of the sanctions was calibrated in the right way.
“We have an adequate oil supply market. We have to ensure that we advance our national security objectives without injuring our economic interests. If we were to increase the price of oil, it would be bad for American consumers, it would be bad for the global economy, and it would give an advantage to Iran,” Deputy State Department Spokesperson Robert Paladino said.
WTI fails to make a decisive recovery, looks to settle below $62
He claimed that in 2019, there will be more oil supply than demand, which will put US in a “much better position to bring all countries importing Iranian crude to zero”.
Video: Iranian FM blasts U.S. sanctions on Tehran
Oil prices fell to their lowest level since mid-August yesterday after America granted sanction waivers to top buyers of Iranian oil and Iran said that it had been able to sell as much oil as it needed to. Brent crude, the global benchmark, dropped by 2.3 per cent to $71.48 a barrel, its lowest since August 20.
On Monday, the United States restored sanctions that target Irans oil exports, as well its banking and transport sectors. Steven Mnuchin, US Treasury Secretary, said Washington aimed to bring Iranian oil exports to zero, but 180-day exemptions were granted to eight importers: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey.
Earlier today, the data from China, who is allowed to continue to import oil from Iran, revealed that crude oil imports in October rose to a record high of 9.61 million barrels per day to provide a short-term boost to crude oil prices. On the other hand, the weekly report published by the EIA yesterday showed that crude oil stocks in the U.S. rose 5.8 million barrels and the output increased to 11.6 million barrels. At this rate, the United States has overtaken Russia as the world's biggest oil producer.
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