Iran’s oil cus­tomers re­sist­ing US pres­sures

Iran Daily - - National -

By Our Staff Writer

A glance at the poli­cies adopted by Iran’s ma­jor oil cus­tomers to­wards their fu­ture crude im­ports from the coun­try shows that, ex­cept South Korea, they have turned a blind eye to threats by US Pres­i­dent Don­ald Trump and are con­tin­u­ing their pur­chases from Tehran.

This comes de­spite US pres­sures on them to halt im­ports from Iran while in less than a month (on Novem­ber 4) the sec­ond round of uni­lat­eral US sanc­tions on Iran will kick in.

Time is prov­ing US cal­cu­la­tions to re­duce Iran’s oil ex­ports to zero to be in­cor­rect. On May 8, the Trump ad­min­is­tra­tion pulled the US out of the Joint Com­pre­hen­sive Plan of Ac­tion (JCPOA), signed in July 2015 be­tween Tehran and P5+1, and an­nounced that Iran oil cus­tomers must com­pletely cut their im­ports from the Mid­dle East­ern state by Novem­ber 4.

Trump has re­peat­edly warned that once the sanc­tions take ef­fect, any non­com­pli­ance by cus­tomers of Iran’s oil will lead to se­ri­ous con­se­quences.

Nev­er­the­less, con­cur­rent with the US an­nounc­ing its plan to stop Iran’s oil ex­ports, ex­perts un­der­lined the in­ef­fec­tive­ness of such a pol­icy as they main­tained that in ad­di­tion to global mar­kets’ in­ca­pa­bil­ity to fill the sup­ply void the ab­sence of Iran’s oil would cre­ate, the coun­try’s ma­jor cus­tomers will not be able to com­pletely halt their im­ports from the Mid­dle East­ern state.

A glance at in­ter­na­tional de­vel­op­ments over the past few weeks con­firms that the global mar­ket is not yet pre­pared for the ab­sence of Iran’s crude and the coun­try’s cus­tomers are still seek­ing waivers from Wash­ing­ton’s uni­lat­eral sanc­tions.

Faced with a the huge wave of in­ter­na­tional crit­i­cism lev­eled against it, and hav­ing re­al­ized that its plot to elim­i­nate Iran from the in­ter­na­tional en­ergy mar­ket is doomed to fail­ure, Wash­ing­ton is grad­u­ally re­vis­ing its sanc­tions pol­icy and grant­ing ex­emp­tions to Tehran’s ma­jor cus­tomers.

An Oc­to­ber 9 re­port by the Wash­ing­ton Free Bea­con said the Trump ad­min­is­tra­tion is open to al­low­ing some coun­tries to con­tinue im­port­ing Ira­nian oil, de­spite prom­ises to tighten the screws on Tehran and any coun­try that con­tin­ues do­ing busi­ness with the Is­lamic Repub­lic.

It said this is ac­cord­ing to US of­fi­cials who con­firmed that some na­tions may get a tem­po­rary pass from a cadre of new sanc­tions set to be im­posed next month.

The re­port added the lat­est con­ces­sions come amid a widen­ing bat­tle in the Trump ad­min­is­tra­tion over the sever­ity of new sanc­tions set to be im­posed on Iran early next month.

“While top of­fi­cials in the Trump ad­min­is­tra­tion, in­clud­ing Pres­i­dent Trump him­self, have vowed to crack down on global busi­ness deal­ings with Iran, some of­fi­cials have been work­ing to lessen the sever­ity of these sanc­tions through waivers and other con­ces­sions.”

China, Iran’s big­gest oil cus­tomer, im­ports more than 600,000 bar­rels of crude from the Mid­dle East­ern state per day. Dur­ing the PRE-JCPOA era, when Iran was un­der se­vere in­ter­na­tional sanc­tions, China used to buy 40 per­cent of the coun­try’s to­tal oil ex­ports. The East Asian state in­creased its crude im­ports from Iran fol­low­ing the sign­ing of the JCPOA.

De­spite pres­sures by the US dur­ing the past few months, China has an­nounced that it will not stop im­port­ing oil from Iran. Chi­nese firms have even in­creased their use of Ira­nian oil tankers to guar­an­tee that they will not halt im­ports from the coun­try.

In­dia, the sec­ond ma­jor cus­tomer of Iran’s oil, has also re­sisted US pres­sures and ex­pressed hope that it would be able to ob­tain ex­emp­tions from the sanc­tions.

In­dia has an­nounced that it plans to im­port nine mil­lion bar­rels of oil from Iran in Novem­ber, when US sanc­tions on Iran are ex­pected to go into force.

Ear­lier, In­dian Oil Min­is­ter Dhar­men­dra Prad­han said New Delhi is in talks with all re­lated of­fi­cials to ob­tain ex­emp­tions from sanc­tions on Tehran.

In ad­di­tion, the Rhum gas field, lo­cated in the North Sea, is jointly shared by Iran and the UK. Since the field sup­plies around five per­cent of Bri­tain’s gas de­mand, the con­tin­u­a­tion of gas ex­trac­tion from it is es­sen­tial to the UK.

The Rhum field – about 240 miles north­east of Aberdeen, off Shet­land – is co-owned by the Na­tional Ira­nian Oil Com­pany (NIOC). BP is also a part­ner but its stake is in the process of be­ing sold to Ser­ica En­ergy.

As per the US sanc­tions on Iran’s oil sec­tor and the NIOC, ac­tiv­i­ties in this field are re­quired to be sus­pended by Novem­ber 4. How­ever, the UK’S pres­sure forced the US to back down on its plan to in­clude the field in its sanc­tions list.

On Oc­to­ber 9, Reuters wrote that Wash­ing­ton had granted BP and Ser­ica En­ergy a new li­cense to run the gas filed, in a rare ex­emp­tion by the Trump’s ad­min­is­tra­tion.

More­over, in the POST-JCPOA era Euro­peans pur­chased 40 per­cent of Iran’s over­seas sales of oil. Although cer­tain Euro­pean firms have an­nounced that they would stop im­ports from Iran, the EU and Iran are in the fi­nal stages of ac­ti­vat­ing a mech­a­nism known as the Spe­cial Pur­pose Ve­hi­cle (SPV) to fa­cil­i­tate pay­ments re­lated to Iran’s ex­ports – in­clud­ing oil – and im­ports, so long as the firms in­volved were car­ry­ing out le­git­i­mate busi­ness un­der EU law.

Ja­pan, one of top five im­porters of Iran’s oil, is still pur­chas­ing crude from Tehran. It has even in­creased im­ports from Iran in the past few months.

Turkey has also re­acted neg­a­tively to US ex­ces­sive de­mands and calls for sus­pend­ing im­ports from Iran, say­ing Ankara is not com­pelled to abide by Wash­ing­ton’s de­ci­sions.

Turk­ish of­fi­cials have an­nounced that, de­spite US sanc­tions, they will re­main com­mit­ted to their oil and gas con­tracts with Iran, as they only think of safe­guard­ing Turkey’s in­ter­ests.

In ad­di­tion, re­ports show that South Korea, which has al­ready stopped oil im­ports from Iran, is in ne­go­ti­a­tions with the US to gain ex­emp­tions from sanc­tions on Tehran. Seoul has so far held sev­eral rounds of talks with the US to this end.

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