Trump's Iran oil sanctions risk Asian reprisals

Trump's Iran oil sanctions risk Asian reprisals

Tehran is prepared for a USA decision to end waivers granted to buyers of Iranian crude, an Iranian oil ministry source said on Monday, as the Revolutionary Guards repeated their threat to close the strategic Strait of Hormuz, Iranian media reported.

"While there will be volatility in the near term, we do not think that today's announcement will structurally drive a sustained or significant spike in oil prices", Rome said.

Trump administration officials said the waivers, originally granted to eight countries, were motivated by a desire to avoid a spike in oil prices in a tight market past year.

"If we are prevented from using it, we will close it", the state-run Fars news agency reported, citing Alireza Tangsiri, head of the Revolutionary Guard Corps navy force.

The United States reimposed sanctions in November on exports of Iranian oil after U.S. President Donald Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers last May. "In the next few weeks, the Kingdom will be consulting closely with other producing countries and key oil consuming nations to ensure a well-balanced and stable oil market, for the benefits of producers and consumers as well as the stability of the world economy".

In addition to China and India, the economies of Japan, South Korea, Taiwan, Turkey, Italy and Greece had also been granted waivers.

Hossein Aghaie Joobani, an Iranian scholar based in Turkey and contributing editor to Asian Politics & Policy, expects the US decision to have devastating consequences for the Iranian economy.

"The Trump administration and our allies are determined to sustain and expand the maximum economic pressure campaign to end the regime's destabilising activity threatening the United States, our partners and allies and security..."


The move comes as the administration toughens its already strict penalties on Iran by trying to choke off all the revenue the country makes from oil sales.

Last year, Pompeo laid out a wish list of 12 demands for Iran to meet if it wants sanctions lifted. The person described that not as a waiver but more as a brief grace period.

The White House says the U.S.is ending exemptions from sanctions for countries that import Iranian oil. The United States may not succeed in cutting Iran's oil exports to zero. He estimated United States sanctions have cost the Islamic republic US$10 billion so far. The EU and most United States allies continue to support the JCPOA.

"And it would have perpetuated a humanitarian crisis in Yemen".

"We have been monitoring and analysing all possible scenarios and conditions for the advance of our country's oil exports, and necessary measures have been taken".

Iran's oil exports have dropped to about 1 million barrels per day (bpd) from more than 2.5 million bpd prior to the re-imposition of sanctions. In other words, they may let the oil market continue to tighten before they add supply.

Some of Iran's customers have been preparing for the cutoff.

Prior to the re-imposition of sanctions, Iran was the fourth-largest producer in OPEC at nearly 3 million barrels per day (bpd), but April exports have shrunk to well below 1 million bpd, according to ship tracking and analyst data in Refinitiv.


That, on its face, would suggest that the impact on oil prices from the expiration of Iran sanctions waivers could be limited.

Geng Shuang, a Chinese Foreign Ministry spokesman, said at a daily news briefing in Beijing on Monday that it opposed unilateral USA sanctions against Iran and that China's bilateral cooperation with Iran was in accordance with the law.

Beijing also criticised the move.

The Trump administration was expected to grant a similar exemption for Afghanistan to continue energy imports from Iran, a USA official said. He said the move "is of great importance for increasing pressure on the Iranian terrorist regime".

But critics said it amounted to a demand for Tehran to capitulate and increased the potential for confrontation.

The decision not to renew the waivers is a victory for national security adviser John Bolton and his allies who had argued that USA promises to get tough on Iran were meaningless with waivers still in place.

"Trump is bizarrely set on this destructive policy even as it threatens USA security and risks American voters' digging deeper into their pockets to pay for rising gas prices".


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