No short-term waiver for China on Iran oil purchase

Ann Santiago
April 29, 2019

The recent steps against Venezuela and Iran seem to help Washington by supporting the cost effectiveness of the U.S. oil industry, especially the country's shale oil, according to Denis Lisitsin, Aerarium Group's asset management director.

However, waivers were granted to eight main buyers of Iranian crude - India, China, Greece, Italy, South Korea, Japan, Turkey and Taiwan.

India is already well on their way to being able to wean themselves off of Iranian oil completely thanks to the conditions of the six-month waiver granted by the United States in November 2018, which required waiver recipients to import heavily reduced quantities of Iranian oil (the waivers are officially called significant reduction exceptions).

President Trump is in regular contact with the Organization of the Petroleum Exporting Countries (OPEC), according to the White House.

"At least India and China are not scared of U.S. sanctions very much, while the remaining European exporters will probably look for alternative routes to keep on purchasing oil from the Islamic Republic, avoiding the financial instruments that are under the United States control", Pushkarev told RT.

He further rejected the Saudi and Emirati officials' claims of making up for Iran's lost oil in the global market and said, "I believe they are overstating their oil capacities".

He also said that it will not be easy to find an alternate for Iran's oil. In a note published Monday, the same day as the Trump administration's announcement, analysts at Eurasia Group said "New Delhi will cut imports substantially but probably maintain approximately 100,000 bpd of Iranian imports paid for using a rupee payment system".

Obama's sanctions targeted only Iran's nuclear programme. "Our cooperation with Iran is open, transparent, lawful and legitimate, thus it should be respected".

The prices have also been easing since Thursday as surging inventories of crude oil in the USA outweighed the effect of sanctions on Iran that could reduce global supplies.

These countries will have to look for alternative sources of crude oil, which may have implications for the OPEC+ agreement to reduce production, which ends at the beginning of July.

China, the largest importer of Iranian oil, called the unilateral imposition of sanctions "illegal", while Russian Federation said the action was reckless.

Jareer Elass is a Washington-based energy analyst, with 25 years of industry experience and a particular focus on the Arabian Gulf producers and OPEC.

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