US Likely to Extend Iran Oil Sanctions Waivers
The United States is likely to extend waivers from sanctions on Iranian oil imports in May, but will reduce the number of countries receiving them to placate top buyers China and India and to decrease the chance of higher oil prices, analysts said.
Washington surprised oil markets after granting waivers to eight Iranian oil buyers when the sanctions on oil imports started in November, Reuters reported.
Benchmark Brent crude futures fell 22% that month and the waivers influenced OPEC decision to agree in December to supply cuts starting in 2019.
Reducing the number of waivers will limit oil exports from Iran, the fourth-largest producer in OPEC, but the US is unlikely to meet its earlier target of driving Iranian oil exports to zero.
China, India, Japan, South Korea and Turkey are likely to be given waivers after they expire in May that could cap Iran’s crude oil exports at about 1.1 million barrels per day, US-based analysts at Eurasia Group said on Thursday. That would remove Italy, Greece and Taiwan from the current waivers list.
“Other geopolitical priorities will moderate the administration’s desire to halt Iranian exports, particularly with Iran’s top two purchasers, China and India,” the analysts said.
“The reductions will probably hit the Iranian economy hard especially because President Hassan Rouhani’s administration is planning its budget around unrealistically high expectations for oil revenue.”
Asia’s Iranian crude imports fell to their lowest in more than five years in November when US sanctions took effect.
China and India continued to import Iranian oil in November while Turkey resumed imports in December.
source: Financial Tribune
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