US ends sanction waivers for oil imports from Iran

Saudi Aramco's Ras Tanura oil refinery in Saudi Arabia. Oil has rallied almost 40 per cent this year as the Organisation of Petroleum Exporting Countries and its allies continued their commitment to curb output in a bid to avert a glut. Yesterday, an
Saudi Aramco's Ras Tanura oil refinery in Saudi Arabia. Oil has rallied almost 40 per cent this year as the Organisation of Petroleum Exporting Countries and its allies continued their commitment to curb output in a bid to avert a glut. Yesterday, an Iranian Oil Ministry source said Teheran is prepared for the decision to end waivers.PHOTO: REUTERS

White House vows to ensure global oil market remains well supplied

LONDON/WASHINGTON • United States President Donald Trump has decided to eliminate all waivers issued to eight economies allowing them to buy Iranian oil without facing US sanctions, the White House said yesterday, while vowing to ensure the global oil market remains well supplied.

"The United States, Saudi Arabia and the United Arab Emirates... along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied," the White House said.

Oil prices gained yesterday following the announcement. At 1250 GMT (Singapore time 8.50pm), US benchmark West Texas Intermediate for May delivery was at US$65.39 a barrel, up 2.2 per cent in electronic trading before the market officially opened.

Brent for June settlement on London-based ICE Futures Europe exchange reached US$73.72 a barrel at 9am in New York yesterday, up 2.4 per cent for the session. Prices briefly were up as much as 3.3 per cent intraday, touching a new high for 2019.

Eight governments were initially given six-month reprieves from the unilateral US sanctions on Iran, which were to expire on May 2. They include India, China and Turkey. Greece, Italy, Japan, South Korea and Taiwan have already heavily reduced their purchases from Iran.

The White House said of its latest move: "This decision is intended to bring Iran's oil exports to zero, denying the regime its principal source of revenue."

US Secretary of State Mike Pompeo said yesterday that the United States is not extending any waivers exempting importers of Iranian oil from US sanctions and there will be no grace period for those economies to comply.

"We're going to zero. We're going to zero across the board," Mr Pompeo told reporters after the announcement. "There are no (oil) waivers that extend beyond that period, full stop."

Oil has rallied almost 40 per cent this year as the Organisation of Petroleum Exporting Countries and its allies, including Russia, continued their commitment to curb output in a bid to avert a glut. US sanctions on Iran and Venezuela, and unexpected losses in Libya, have further squeezed supplies.

An Iranian Oil Ministry source said yesterday that Teheran is prepared for the decision to end waivers, as the Revolutionary Guards threatened to shut the Strait of Hormuz, a major oil shipment channel in the Gulf.

"The maximum pressure campaign could not be maximalist until the administration cut off Iran's oil exports," said Mr Mark Dubowitz, chief executive of the Foundation for Defence of Democracies. "Iran's economy will be under severe pressure as its hard-currency earnings dry up and its foreign exchange reserves plummet."

BLOOMBERG, AGENCE FRANCE-PRESSE, REUTERS

A version of this article appeared in the print edition of The Straits Times on April 23, 2019, with the headline 'US ends sanction waivers for oil imports from Iran'. Print Edition | Subscribe