USA to grant 8 countries Iran sanctions waivers for oil

An Iranian and a European flag

AFP 2018 EMMANUEL DUNANDHumanitarian Aid to Iran on Hold Until US Clarifies Sanctions

Bloomberg reported on Friday that South Korea and Japan had received waivers along with India, which relies heavily on Iranian supplies.

Countries that get waivers under the revived sanctions must pay for the oil into escrow accounts in their local currency.

There was no immediate comment from the White House.

The U.S. has reportedly broadly agreed to grant India a waiver from the sanctions, after Iran's second-largest oil customer had agreed to reduce Iranian imports by a third in 2018-2019, India's The Economic Times reported on Thursday, citing sources familiar with the issue.

But the move has backfired on U.S. President Donald Trump as it led to a steep rally in oil prices, including the cost of gasoline, ahead of U.S. mid-term elections.

However, eight unnamed countries will not be penalised by the USA for continuing to import Iranian oil.

The Organization of the Petroleum Exporting Countries boosted oil production in October to 33.31 million bpd, up 390,000 bpd and the highest by OPEC since 2016.

In the first three weeks of October, Iran's crude and condensate exports averaged around 1.90-1.95 million bpd according to Platts ship tracking data, but exports could be even higher due to the Iranian tactic to switch off tracking devices to hide some volumes and destinations of its oil exports, sources say.

Russian Energy Ministry data showed on Friday the country pumped 11.41 million barrels per day (bpd) of crude oil in October, a 30-year high.

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In a presidential memorandum late on October 31, Trump said he determined there was sufficient supply of petroleum and petroleum products in the global market to cushion the impact of a cut in purchases of Iranian oil.

"We still expect that the global oil market will be in deficit in 4Q18", the USA bank said. The contract has fallen by nearly 12% since the beginning of October, when it reached its highest since 2014. The official announcement is expected to come over the next few days.

"We think Trump will agree to China importing some volumes, similar to the treatment that India and South Korea receive", he said.

Analysts said, however, that waivers would likely be only temporary.

"The U.S. may use waivers to slow-walk implementation, but these will not apply indefinitely", he added.

Turkey, a key destination for Iranian crude, may be among countries that are getting an exemption, Energy Minister Fatih Donmez told reporters in Ankara on Friday.

U.S. Arab allies Saudi Arabia and the United Arab Emirates as well as Israel have long sought for Washington to work to curtail non-Arab and predominantly Shiite Muslim Iran's influence in the Middle East, including in war-torn Syria.

Russian Federation has been planning to import oil from Tehran but no major projects have materialized.

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