US imposing curbs on buyers of Iranian oil

Sanctions to kick in by Nov 4; policy shakes financial markets accustomed to waivers

WASHINGTON • The United States has said it will impose sanctions against all importers of Iranian oil by Nov 4, a surprisingly tough position that roiled oil markets and is likely to further alienate allies and adversaries alike.

The policy shook financial markets that had become accustomed to waivers for US sanctions, which in years past had been granted to companies in countries such as India and China as long as they showed steady reductions in their imports of Iranian oil.

But a senior State Department official said on Tuesday morning that such routine waivers were not likely to be issued by the Trump administration, although he did not rule them out entirely.

Iran is the third-largest exporter among the Organisation of the Petroleum Exporting Countries. Japan is one of its major customers along with other Asian buyers including China, South Korea and India.

Japan's Chief Cabinet Secretary Yoshihide Suga said it was analysing the impact of the sanctions on Iran and would talk with Washington and other nations to avoid Japanese firms being adversely affected. The Kyodo news agency reported last week, citing sources, that Japanese Prime Minister Shinzo Abe was considering going to Iran next month for talks with President Hassan Rouhani.

In South Korea, an Energy Ministry official who declined to be named said the government would keep negotiating with the US in order to get an exemption from the US sanctions.

"We are in the same position as Japan. We are in talks with the United States and will keep negotiating to get an exemption," said the official.

The Trump administration may be signalling an unusually tough position to gain leverage before the first official meeting in Vienna of the remaining signatories to the Iran nuclear deal since President Donald Trump announced last month that he was leaving the accord.

US diplomats will not participate in the Vienna talks, set for next week, since the US is no longer a party to the deal. But senior Trump administration officials will talk with European diplomats on the sidelines of the meeting about efforts to further restrain Iran.

Following Washington's withdrawal from the deal, European allies vowed to resist the reimposition of sanctions. This month, European leaders applied for waivers to the renewed US sanctions against Iran, saying that preserving the agreement was vital to the security of their respective nations.

Few expected the waivers to be granted, but Tuesday's abrupt announcement, which largely ruled them out, could cause more strains.

Briefing reporters on condition of anonymity, a top State Department official said he had yet to visit India or China to discuss the reimposition of sanctions. He said companies in both countries that continue to buy oil and other products from Iran after Nov 4 will be barred from selling anything in the US.

Mr Rouhani on Tuesday promised Iranians that the government would be able to handle the economic pressure of new US sanctions amid reports of a second day of demonstrations in protest against financial hardship and a weakening rial.


A version of this article appeared in the print edition of The Straits Times on June 28, 2018, with the headline 'US imposing curbs on buyers of Iranian oil'. Print Edition | Subscribe